The offshore yuan inched higher to around 6.89 per dollar on Thursday, paring losses from the previous session as waning expectations of an imminent rate cut by the People’s Bank of China supported the currency. China’s interest rate markets are now signaling a lower probability of further monetary easing, following data that point to a stronger-than-expected start to 2026, a modest recovery in consumer prices, and an easing of factory-gate deflation. At the same time, a sharp rise in global oil prices, driven by escalating conflict in the Middle East, is likely constraining the scope for aggressive monetary stimulus. Investors are recalibrating their outlook, with markets now anticipating a steady or slightly tighter policy stance from the central bank. Focus is turning to Friday’s announcement of China’s benchmark loan prime rates, where the one-year and five-year tenors are widely expected to remain unchanged at 3.0% and 3.5%, respectively.