The Chinese yuan remained stable on Monday, reacting to a slight de-escalation of tensions in the Middle East which lessened demand for the US dollar as a safe haven. While geopolitical concerns eased, expectations of further interest rate increases by the US Federal Reserve continued to bolster the dollar’s value. Traders are now primarily focused on the potential trajectory of US monetary policy rather than the immediate risks posed by the conflict in Iran. The shift in focus comes as markets assess the impact of potential rate hikes on the global economy. Despite the reduced risk premium associated with the Middle East, the dollar maintained some strength due to the anticipated US rate adjustments. Analysts suggest the yuan’s performance will likely be dictated by developments in US economic data and Federal Reserve communications in the coming weeks. This dynamic highlights the increasing influence of US monetary policy on global currency markets.