FX.co ★ Offshore Yuan Remains at Multi-Year High

The offshore yuan strengthened to around 6.76 per dollar on Tuesday, hovering near its strongest level since February 2023, as investors increasingly viewed Chinese assets as a relative safe haven amid escalating geopolitical tensions involving Iran. Uncertainty persisted after reports indicated that Iran had suspended indirect talks with Washington over Israel's military operations in Lebanon, even as US President Trump maintained that negotiations were still underway. China’s diversified energy supply base and its comparatively limited direct exposure to the Middle East have bolstered the appeal of its financial markets during the conflict, supporting the yuan’s resilience. Nonetheless, further appreciation of the currency may be constrained by Beijing’s preference for exchange-rate stability, evident in the People’s Bank of China’s continued weaker-than-expected daily fixings and in potential dollar-buying interventions by major state-owned banks.