CNH

The offshore yuan held its gains around 6.74 per dollar on Friday, remaining at its strongest level since February 2023, as investors raised expectations for additional policy support following PMI data releases. Official figures showed China’s manufacturing PMI fell to 49.2 in July 2026 from 50.3 in June, marking its first contraction since February, while the non-manufacturing PMI slipped to 49.0 from 50.2, signaling a renewed downturn after two months of modest expansion. The weak readings followed data showing Q2 GDP growth missed expectations and fell below the government’s 4.5%-5% target range. At the Politburo meeting, authorities vowed timely policy measures and to accelerate public spending and government bond fund usage. However, policymakers are expected to adopt a cautious approach to unveiling additional stimulus measures amid double-digit export growth.

The offshore yuan rose to around 6.76 per dollar on Monday, its strongest level since mid-June, as easing geopolitical tensions in the Middle East reduced safe-haven demand for the US dollar. US Ambassador Mike Waltz said President Trump had paused strikes on Iran for a second consecutive night to facilitate diplomatic efforts, while an Iranian military spokesperson said Tehran had suspended its retaliatory operations. The development signals a tentative easing in tensions after nearly two weeks of reciprocal attacks that had effectively undermined the June ceasefire. On the domestic front, investors are turning their attention to the upcoming Politburo meeting later this week, where President Xi Jinping and other top policymakers are expected to outline priorities for the second half of the year. Expectations for additional policy support have grown after recent economic indicators pointed to an uneven recovery, reinforcing calls for measures to bolster growth and stabilize demand.

The offshore yuan traded around 6.76 per dollar on Tuesday, reaching its strongest level in a month, supported by firmer official guidance from the People’s Bank of China. The central bank set the daily midpoint rate at 6.7917 per dollar, 31 pips stronger than the previous fixing of 6.7948. The latest move signaled continued support for the currency, even as geopolitical tensions in the Middle East boosted demand for the US dollar as a safe-haven asset. Providing additional support, the State Council emphasized accelerating policy implementation and improving the efficiency of fiscal spending, underscoring its commitment to bolstering growth after Q2 GDP slowed to 4.3%, the weakest pace in more than three years and well below Beijing’s annual target range of 4.5% to 5%. Investor focus is now turning to the Communist Party of China’s upcoming Politburo meeting later this month for signals on the economic policy agenda for the second half of the year.

The offshore yuan hovered around 6.77 per dollar on Monday, remaining near a one-week low as investors weighed escalating tensions in the Middle East and the People’s Bank of China’s decision to leave key lending rates unchanged. Sentiment remained fragile after the US launched fresh airstrikes against Iran over the weekend, while Tehran declared its ceasefire with Washington no longer in effect. On the monetary policy front, the People’s Bank of China left its key lending rates unchanged at record lows for a 14th consecutive month in July, with the one-year loan prime rate (LPR) held at 3.0% and the five-year LPR at 3.5%. The decision came despite softer-than-expected second-quarter economic data that underscored the uneven nature of China’s recovery, as robust manufacturing output and exports continued to provide support while sluggish consumer spending weighed on growth. Attention is now focused on the upcoming Politburo meeting later this month for signals on stimulus measures.

The offshore yuan strengthened to around 6.76 per dollar on Wednesday, extending gains from the previous session to its strongest level in a month, supported by a weaker US dollar even as China’s economic data pointed to uneven growth. The greenback remained under pressure after softer-than-expected US inflation data reduced expectations for a near-term Federal Reserve rate hike, with traders now pricing in a pause at the July meeting despite ongoing oil-driven inflation risks. Meanwhile, China’s economy expanded 4.3% year-on-year in Q2, marking the weakest growth since Q4 2022 and falling below Beijing’s 2026 target range of 4.5%–5.0%. Fixed-asset investment declined 5.7% in the first half, worse than both market expectations and the January–May decline. However, signs of resilience emerged as industrial production accelerated to a three-month high of 5.3% in June, retail sales rebounded 1%, and the urban unemployment rate eased to a one-year low of 5.0%.

The offshore yuan held its decline around 6.78 per dollar on Tuesday as investors balanced expectations of slower economic growth against stronger-than-expected trade data. China’s economy is projected to expand 4.5% year-on-year in Q2 on Wednesday, down from 5% in Q1 and near the lower end of Beijing’s 2026 growth target of 4.5%–5%, amid weak consumer spending, a prolonged property downturn, and subdued private investment. Meanwhile, June trade data pointed to solid external demand. Exports surged 27% year-on-year to a record USD 412.4 billion, while imports jumped 36% to an all-time high of USD 286.8 billion, both exceeding forecasts. As a result, the trade surplus widened to USD 125.6 billion. Strong global demand for AI-related hardware and higher semiconductor prices continued to support Asia’s trade flows, helping cushion the impact of domestic economic weakness. Investors are now awaiting this month’s Politburo meeting for clues on potential policy measures to bolster growth.

The offshore yuan weakened to around 6.78 per dollar on Monday, retreating from a near three-week high reached in the previous session as escalating tensions in the Middle East boosted demand for safe-haven assets. The US dollar strengthened as surging oil prices revived expectations that the Federal Reserve may need to keep monetary policy tighter for longer, following a weekend of intensified clashes between the US and Iran and continued uncertainty over shipping through the Strait of Hormuz. However, the yuan’s losses were partly tempered by the People’s Bank of China’s midpoint fixing of 6.7972 per dollar, its strongest since February 10, 2023, although it was set 122 pips weaker than Reuters’ estimate. Investors are now awaiting a raft of key Chinese economic data due later this week, including trade figures, Q2 GDP, industrial production, retail sales, and unemployment data.