CNH

The offshore yuan edged higher to above 6.81 per USD, hitting its highest in more than three years as stronger-than-expected growth in China’s economy boosted sentiment. The world’s second-largest economy grew 0.5% in the first quarter from a year ago, accelerating from the 4.5% gain in the prior quarter and beating forecasts. However, signs of weakness started to emerge as the war in Iran disrupted global supply chains. March activity data showed a mixed backdrop, with industrial output rising 5.7% but slowing from earlier in the year, while retail sales increased 1.7%, missing expectations and easing from the previous period. This followed recent trade data, which highlighted a severe cooling in China’s export growth, indicating that the ongoing Middle East war may be dragging down global demand. Meantime, the US and Iran are considering extending their two-week ceasefire to allow more time for talks, even as the Strait of Hormuz remains effectively closed under a dual blockade.

The offshore yuan weakened to around 6.83 per dollar on Monday, snapping a six-session winning streak, as the greenback strengthened broadly after US–Iran peace talks ended without a breakthrough. The face-to-face negotiations between the two countries’ delegations concluded with both sides acknowledging that significant differences remain. Vice President JD Vance reiterated the lack of progress, while Iranian representatives echoed similar concerns. Following the talks, President Trump announced that the US Navy would begin blockading the Strait of Hormuz, raising further concerns over potential disruptions to global energy supplies. On the domestic front, investors are closely watching a packed economic calendar this week. Key data releases, including the trade balance, Q1 GDP growth, industrial output, retail sales, and the unemployment rate, are expected to provide fresh insights into the strength and trajectory of the economy.

The offshore yuan edged lower to around 6.83 per dollar, ending a five-session winning streak, after the People’s Bank of China reaffirmed its cautious monetary easing stance, even as consumer inflation slowed and producer prices rebounded. Annual consumer inflation slowed more than expected to 1% in March 2026 from 1.3% in February, as the seasonal boost from holiday spending faded.

The PBoC maintained its cautious stance at a quarterly meeting last month, signaling limited appetite for aggressive easing after a modest rate cut in 2025. Meanwhile, producer prices rose 0.5%, beating forecasts and marking the first increase since September 2022, driven partly by higher global energy costs amid Middle East tensions. While China’s strategic reserves and diversified energy supply have cushioned the impact, signs of domestic pass-through are emerging, as authorities raised retail fuel prices for the third time since late February. Over the week, the yuan is set for its second weekly gain.

The offshore yuan held above 6.83 per USD, pausing near an over three-year high as investors weighed a fragile US–Iran ceasefire. The agreement, tied to a 10-point proposal and contingent on reopening the Strait of Hormuz, initially boosted risk appetite and weakened the dollar. However, sentiment turned cautious after fresh accusations from Iran of violations, citing disputes over uranium enrichment, continued Israeli strikes in Lebanon, and alleged airspace breaches.

Meanwhile, China remains relatively better positioned among Asian peers, with the yuan up about 1.0% against the dollar this month and 2.4% firmer year-to-date, as markets price in reduced geopolitical risk. The currency’s resilience has been supported by China’s large oil stockpiles and comparatively stable energy supply chains. Focus now turns to upcoming inflation numbers due Friday, expected to show a modest rise in annual consumer prices and a return to yearly growth in producer prices for the first time since 2022.

The offshore yuan strengthened to around 6.82 per dollar on Wednesday, continuing its upward momentum for a fourth consecutive session and reaching its highest level since February 2023, primarily driven by a pressured greenback following a ceasefire announcement.

President Donald Trump revealed that the US and Iran had reached a two-week ceasefire agreement, narrowly averting what the president had previously warned could escalate into an attack with catastrophic consequences for the region. Shortly after the announcement, Iranian Foreign Minister Seyed Abbas Araghchi stated that access to the Strait of Hormuz would be possible through coordination with Iran’s Armed Forces. Domestically, investors are turning their attention to China’s upcoming inflation data, due later this week. Analysts expect a slight uptick in annual consumer prices, while producer prices are projected to see its first annual rise since September 2022.

• USD/CNH gains ground as the US Dollar advances on increased safe-haven demand linked to Middle East uncertainty.
• Trump said Iran’s ceasefire proposal was “not good enough” ahead of his Hormuz Strait deadline.
• The PBOC set the USD/CNY midpoint at 6.8854, higher than the 6.8773 estimate.

USD/CNH gains ground after registering modest losses in the previous session, trading around 6.8800 during the Asian hours on Tuesday. The pair appreciates as the US Dollar (USD) holds gains on increased safe-haven demand ahead of further developments on the Iran deadline by US President Donald Trump to open the Strait of Hormuz.

President Trump warned that he could target Iranian power plants and bridges unless his demands are met by 8:00 PM Eastern Time. Trump said on Monday that the latest proposal for a US ceasefire with Iran is “not good enough” ahead of his deadline for Iran to either reopen the Strait of Hormuz. “It’s not good enough, but it’s a very significant step,” Trump said, adding, “They’re negotiating now, and they’ve made a very significant step. We’ll see what happens.”

The Greenback receives support as Iran war surges energy prices, increasing fears of inflation revival and forcing the US Federal Reserve (Fed), to adopt a more hawkish stance. Traders are pricing in a delay of Fed rate cuts and could even raise borrowing costs later this year if inflationary pressures persist. Market participants are now looking ahead to the latest Federal Open Market Committee (FOMC) Meeting Minutes for clearer guidance on the central bank’s policy trajectory.

The People’s Bank of China (PBOC) set Tuesday’s USD/CNY reference rate at 6.8854, above the 6.8773 estimate, allowing the Yuan to trade within a +/-2% band around the midpoint.

Meanwhile, traders’ focus is shifting to Friday’s inflation data, with consumer prices expected to ease slightly, while producer prices are projected to post their first annual increase since 2022.

The offshore yuan strengthened to around 6.87 per dollar on Monday, extending gains from the previous week in thin holiday trading, even as geopolitical risks remained elevated. Tensions in the Middle East continue to cloud market sentiment, with US allies such as Pakistan, Egypt, and Turkey reportedly working to broker a roughly 45-day ceasefire aimed at averting potential US strikes on Iran’s energy infrastructure and possible retaliation from Tehran.

The latest developments follow President Donald Trump’s decision to extend his deadline to Tuesday for Tehran to reopen the Strait of Hormuz. However, Iran has rejected Washington’s ultimatum, stating it will only fully reopen the waterway once war-related damages are compensated. Domestically, investors are turning their focus to upcoming inflation data due later this week. Consumer inflation is expected to ease slightly, while producer prices are projected to post its first annual increase since September 2022.

The offshore yuan edged higher to around 6.88 per dollar on Friday, trimming gains from the previous session as market sentiment improved on growing hopes for the reopening of the Strait of Hormuz. Iran and Oman are said to be developing a protocol to “monitor transit” through the strategic waterway, a move aimed at easing regional tensions.

Elsewhere, countries such as India and the Philippines are actively negotiating with Tehran to ensure the safe passage of vessels, while also forming small diplomatic circles and exploring barter-style agreements. Meanwhile, China and Pakistan are advocating for their own multi-point diplomatic plan, as Iran maintains tight control over the shipping lane. Domestically, RatingDog data showed China’s composite PMI fell to 51.5 in March from 55.4 in February 2026, as both manufacturing (50.8 vs 52.1) and services (52.1 vs 56.7) sectors slowed. Over the week, the yuan is poised for a weekly gain, breaking a four-week losing streak.