Offshore Yuan Muted After Mixed Data

The offshore yuan held steady to around 7.18 per dollar on Monday, as markets digested a batch of mixed Chinese economic data that offered little clear direction for the currency. While retail sales rose at the quickest pace in over a year in May, industrial production underwhelmed, posting its weakest growth in six months and missing market projections. These figures reinforced concerns over uneven momentum in China’s economic recovery. Market caution also lingered over rising geopolitical tensions after Israel and Iran exchanged fresh attacks over the weekend, which drove safe-haven demand for the US dollar. Additionally, the yuan remained under pressure from ongoing trade uncertainty, as details on the US-China framework agreement were yet to be determined. Meanwhile, the People’s Bank of China set the daily midpoint rate slightly stronger than expected and injected liquidity via reverse repos to ease funding strains, signaling ongoing support amid uncertainty.