Yuan Central Parity Ends Three-Day Decline, US-Iran Ceasefire Talks See Major Breakthrough

The yuan central parity rate ended a three-day losing streak, fixing at 6.7829 on August 26, up 23 basis points from the previous trading day. Over the prior three sessions, the parity rates were 6.7817, 6.7841, and 6.7852 respectively, showing a slight cumulative depreciation. The central parity has returned to a stronger range near 6.78, with both onshore and offshore exchange rates trading notably stronger than the fixing, indicating sustained positive market confidence in the yuan.

**US-Iran Talks Shift as Key Variable**

According to market reports, Qatari mediation has eased the deadlock in US-Iran negotiations, alleviating the "Rashomon" situation between Trump's claims of talks and Iran's denials. However, Iran still denies direct contact, meaning there remains a gap between "progress" and "a deal." Meanwhile, the US military is soliciting so-called "creative" strike options, and the military option has not been ruled out. Uncertainty over the progress of negotiations remains a core factor driving short-term exchange rate volatility.

**Oil Price Plunge Reshapes Inflation and Rate Hike Expectations**

Brent crude has fallen from above $100 in late July to around $79, a decline of over 20%. The rapid drop in oil prices has eased inflation concerns, with market odds of a Fed rate hike in September falling from over 70% a week ago to 58.4%. As the "master switch" in the current logic chain, weaker oil prices cool inflation expectations, reduce rate hike bets, and pressure the dollar, thereby supporting the yuan.

**Stronger Central Parity Guides Market Expectations**

The central parity has remained below 6.80 for several consecutive days, with the spread between onshore/offshore exchange rates and the parity at approximately 380 to 410 basis points, reflecting sustained positive market confidence in the yuan. Future movements will hinge on whether US-Iran talks achieve substantive progress, whether oil prices can stabilize, and further shifts in Fed policy expectations.