FX.co ★ Offshore Yuan Extends Gains

The offshore yuan strengthened to around 6.87 per dollar on Monday, extending the previous week’s gains in thin holiday trading, even as geopolitical risks remained elevated. Tensions in the Middle East continued to weigh on market sentiment, with US allies including Pakistan, Egypt, and Turkey reportedly working to secure a roughly 45-day ceasefire to avert potential US strikes on Iran’s energy infrastructure and possible retaliation from Tehran. These developments came after President Donald Trump extended his deadline to Tuesday for Tehran to reopen the Strait of Hormuz. Iran, however, rejected Washington’s ultimatum, saying it will fully reopen the waterway only after war-related damages are compensated. On the domestic front, investors are shifting their attention to inflation data due later this week. Consumer inflation is expected to ease slightly, while producer prices are forecast to record their first annual increase since September 2022.