FX.co ★ Offshore Yuan Muted After Mixed Data

The offshore yuan maintained a stable position around 7.18 per dollar on Monday as markets assessed a set of mixed economic data from China that failed to provide clear direction for the currency. In May, retail sales surged at their fastest pace in over a year, yet industrial production disappointed, showing its weakest growth in six months and falling short of market expectations. These figures highlighted persisting concerns about the uneven progress of China's economic recovery. Additionally, geopolitical tensions heightened caution in the market, particularly following the exchange of attacks between Israel and Iran over the weekend, which boosted demand for the safe-haven US dollar. The yuan continued to face pressure from persistent trade uncertainties, with the specifics of the US-China framework agreement still undetermined. Meanwhile, the People's Bank of China set the daily midpoint rate slightly stronger than anticipated and infused liquidity through reverse repo operations to alleviate funding strains, demonstrating sustained support amid ongoing uncertainty.