The offshore yuan edged slightly lower to around 6.894 per USD, moving in a tight range as markets stayed cautious amid conflicting signals on Middle East tensions. The dollar initially weakened after Trump delayed planned strikes on Iranian energy infrastructure, citing productive discussions with Tehran. However, the safe-haven currency later rebounded as Iran denied any talks to de-escalate the conflict, directly contradicting those claims. Tehran also said it had launched new attacks on US targets, while Israel continued its strikes on Iran, keeping geopolitical risks and oil prices elevated. Meanwhile, China stands to gain from the conflict due to its lower energy dependence and its edge in renewables. China’s Premier Li also vowed to boost imports of high-quality foreign goods and promote balanced trade, while PBoC Governor Pan sought to calm concerns over China’s trade surplus. The yuan is still expected to be volatile amid dollar strength and fading seasonal support.
