FX.co ★ Offshore Yuan Weakens, Still Set for Weekly Gain

The offshore yuan slipped to around 6.83 per dollar, breaking a five-session winning streak, after the People’s Bank of China reaffirmed its cautious approach to monetary easing, even as consumer inflation softened 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-related spending faded. At its quarterly meeting last month, the PBoC reiterated its prudent stance, signaling limited appetite for aggressive easing following a modest rate cut in 2025. Meanwhile, producer prices rose 0.5%, beating forecasts and marking their first increase since September 2022, partly reflecting higher global energy costs amid heightened tensions in the Middle East. Although China’s strategic reserves and diversified energy imports have helped cushion the impact, signs of domestic cost pass-through are emerging, with authorities raising retail fuel prices for the third time since late February. Despite the latest pullback, the yuan remains on track for a second consecutive weekly gain.