The offshore yuan held its gains around 6.74 per dollar on Wednesday, remaining at its strongest level since early February 2023 as improving prospects for a renewed Middle East agreement bolstered risk sentiment. Qatar said mediation efforts between the US and Iran had entered an advanced phase, with a draft agreement already prepared. US officials indicated growing confidence that a deal could be reached soon, fueling hopes for the reopening of the Strait of Hormuz.
On the domestic front, a private survey showed that China’s Composite PMI fell to a one-year low of 50.8 in July 2026, signaling a broad loss of momentum in the economy. The manufacturing PMI slipped to a four-month low of 50.9, while the services PMI weakened to 50.4, its lowest level in nearly two years.
Meanwhile, the People’s Bank of China conducted a CNY 500 billion three-month outright reverse repo operation to ensure ample liquidity in the banking system, with bids allocated through a multi-tier interest-rate pricing mechanism.
