SHANGHAI: China’s yuan was weaker against the dollar on Friday but looked set to strengthen on the week, despite rising Middle East tension, with the currency at its strongest in a year against major trading partners.
In the spot market, the onshore yuan eased slightly to 6.8867 per dollar by 0337 GMT. It is poised to gain 0.28 percent for the week, if it maintains that level. Its offshore counterpart last fetched 6.8891 per dollar.
Iran stepped up attacks across the Middle East as its new Supreme Leader Mojtaba Khamenei vowed to persevere with the closure of the key Strait of Hormuz shipping lane, as investors brace for a prolonged conflict and higher oil prices.
“While China is not immune to energy shocks from disruptions in the Middle East, its domestic energy capacity, diversified energy mix and possible alternative energy sources leave it in a better position,” ANZ economists said in a note.
Prior to Friday’s market open, the People’s Bank of China (PBOC) set its official midpoint at 6.9007 per dollar, 48 pips or 0.07 percent weaker than the previous setting, and 119 pips softer than a Reuters estimate of 6.8888.
Based on Friday’s official guidance, the trade-weighted CFETS yuan basket index strengthened to 100.15, its highest since March 3, 2025, according to Reuters calculations based on official data.
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