FX.co ★ Offshore Yuan Retreats from Over 3-Year High

The offshore yuan slipped to around 6.76 per dollar on Monday, pulling back from a more than three-year high reached in the previous session, as investors assessed mixed PMI data against a backdrop of uncertainty over the economic fallout from the ongoing Middle East conflict.

Official data showed that China’s Composite PMI rose to 50.5 in May from 50.1 in April, aided by a modest recovery in the non-manufacturing sector (50.1 vs. 49.4), even as the manufacturing PMI (50.0 vs. 50.3) ticked lower. A separate private survey also indicated that the manufacturing PMI eased to 51.8, down from April’s five-year high of 52.2.

Businesses remained focused on developments in the Middle East as they contended with weak demand and rising input costs linked to regional tensions. The outlook for a US–Iran ceasefire agreement stayed uncertain, despite both sides having recently exchanged proposals seeking changes to a draft accord aimed at extending the ceasefire and reopening the Strait of Hormuz.