The offshore yuan inched up to around 6.88 per dollar on Friday, paring the stronger advance seen in the previous session as risk sentiment improved on growing optimism over a potential reopening of the Strait of Hormuz. Iran and Oman are reportedly working on a protocol to “monitor transit” through the strategic waterway, in a bid to ease regional tensions.
At the same time, countries including India and the Philippines are actively negotiating with Tehran to secure safe passage for their vessels, while also building small diplomatic coalitions and exploring barter-style arrangements. China and Pakistan are pushing their own multi-point diplomatic initiative, even as Iran continues to exercise tight control over the shipping lane.
On the domestic front, RatingDog data showed that China’s composite PMI slipped to 51.5 in March from 55.4 in February 2026, reflecting a slowdown in both manufacturing (50.8 vs. 52.1) and services (52.1 vs. 56.7). Despite the softer data, the yuan is on track for a weekly gain, set to snap a four-week losing streak.