Offshore Yuan Weakens Amid Mixed Economic Indicators and Rising Geopolitical Tensions

The offshore yuan retreated to 6.76 per dollar on Wednesday, stepping back from recent multi-year highs as traders balanced conflicting signals regarding the strength of China's economic recovery. While private surveys indicated a strengthening service sector, official and private manufacturing data revealed slowing momentum, reinforcing concerns about economic fragility. Compounding this market uncertainty, broader risk appetite was further dampened by escalating geopolitical conflict in the Middle East following recent military actions involving Iran and the United States.

Asian currencies are trading mostly mixed as markets grapple with renewed Middle East hostilities and sweeping U.S. tariff proposals, which continue to bolster safe-haven demand for the U.S. dollar. The Japanese Yen slipped to the closely watched 160 per dollar level, keeping traders on high alert for intervention by Tokyo.