FX.co ★ Offshore Yuan Edges Lower

The offshore yuan eased to around 6.71 per dollar on Monday, pulling back from a more than three-year high hit in the previous session, as the People’s Bank of China continued to signal a more measured stance toward further currency appreciation. The central bank set its daily midpoint at 6.7795 per dollar, 709 pips weaker than Reuters’ estimate, the largest downside deviation since a record in February 2025.

Chinese banks have also raised dollar deposit rates and stepped up purchases of US Treasuries in recent months, actions that could help curb yuan strength amid rising US yields. At the same time, China is injecting CNY 300 billion ($45 billion) into its largest banks and insurers as part of the country’s biggest financial-sector recapitalization in nearly two decades, aimed at bolstering balance sheets and supporting credit growth as the economy slows. Market focus now turns to trade and inflation data due later this week.