After US-Iran negotiations ended without results, safe-haven demand continued to push up the US dollar, causing the RMB/USD exchange rate to weaken on the 13th.
According to foreign media reports, the RMB/USD once fell to 6.8380, later closing down 0.05% at 6.8340; the offshore RMB/USD rate was reported at 6.8323, down about 0.09%.
On Monday, after the US military announced it would begin blockading all maritime traffic in and out of Iranian ports and coastal areas, the market was once again dominated by safe-haven trades.
The US dollar generally strengthened in early Asian trading. The dollar index stayed above 99, near a one-week high. Oil prices also rose.
Analysts from Nanhua Futures stated in a report: “Currently, the renminbi's movement is basically in sync with the dollar index.”
They added that the continued escalation of US-Iran tensions could push a short-term rebound of the US dollar, thus exerting pressure on the RMB, but the People’s Bank of China has already signaled a preference to maintain RMB exchange rate stability.
The US and Iran held a 21-hour marathon negotiation in Islamabad over the weekend but failed to make a breakthrough to end the war.
The US Central Command stated that from 10am Eastern Time on Monday (10pm Malaysia time), it would implement a blockade on all vessels entering and leaving Iranian ports.