The offshore yuan weakened to around 6.78 per dollar on Tuesday, pulling back from a more than three-year high set in the previous session, as renewed military strikes undermined optimism about a potential US–Iran peace deal. The United States carried out strikes in southern Iran, targeting vessels allegedly attempting to deploy naval mines as well as missile launch sites, in what Washington characterized as defensive operations.
Sentiment toward the yuan was further pressured after the People’s Bank of China (PBoC) set the daily midpoint at 6.8288 per dollar, 466 pips weaker than the Reuters estimate, though still the strongest fixing since February 2023. The central bank has consistently guided the midpoint weaker than market expectations, a move widely interpreted as an attempt to maintain overall currency stability. Looking ahead, the yuan is expected to trade largely within a range, underpinned by the PBoC’s stability-oriented policy stance and easing corporate demand for dollars.
