The offshore yuan traded around 6.81 per dollar, hovering near its strongest level since March 2023, supported by improved risk sentiment following renewed diplomatic signals between the US and Iran. Former US President Donald Trump said Tehran had reached out to pursue a deal, while Iranian President Masoud Pezeshkian indicated a readiness to continue negotiations, provided they are consistent with international law.
The comments followed an initial round of talks that failed to yield an agreement, after which the US announced a blockade of the Strait of Hormuz. The ongoing Middle East conflict has increased interest in China’s currency as a potential alternative to the US dollar, reviving “petroyuan” discussions previously promoted by Xi Jinping. The yuan has gained traction in energy trade, with Iran accepting it as payment for oil and reportedly favoring vessels that use the currency when transiting the Strait of Hormuz.
In a separate development, Xi is expected to meet Vietnamese leader To Lam this week to deepen energy cooperation amid heightened supply risks. On the domestic front, investors are awaiting upcoming trade data, with both exports and imports forecast to soften.
