The Chinese yuan rose to its highest level in more than three years against the dollar during trading on Tuesday, June 2, amid monitoring of developments in the Middle East.
The yuan rose in onshore trading to 6.7621 yuan per dollar in morning trading, its strongest level since February 2023.
Lebanon announced yesterday, Monday, a partial ceasefire between Hezbollah and Israel, in what can be considered a limited de-escalation of the conflict.
Earlier, Iranian state media said that Tehran had halted indirect negotiations with the United States and might end the ceasefire, due to the escalation in Lebanon.
But on the other hand, US President Donald Trump confirmed that talks with Iran are continuing at a rapid pace.
Analysts at ANZ Bank said in a note quoted by Reuters that markets remain optimistic that America and Iran will soon reach an agreement to end the conflict and reopen the Strait of Hormuz.
They revised their forecasts for the yuan's appreciation for the second and third quarters to 6.75 and 6.73 respectively, from 6.80 and 6.75 in forecasts published last month, reflecting the yuan's recent strength while maintaining the year-end target of 6.70 yuan per dollar.
The Chinese yuan has been one of the best-performing emerging market currencies since the start of the Iran war at the end of February, and analysts at Barclays expect the Chinese currency to continue to outperform its peers.
