The Chinese yuan weakened against the U.S. dollar in the Asian session on Monday, amid heightened tensions in Middle East following Iran's threat of retaliation against U.S air strike last week.

Iran said that it would revenge against the U.S. killing of Soleimani and it will no longer abide by the limits on uranium enrichment contained in the 2015 nuclear deal.

The yuan hit a weekly low of 6.9785 against the greenback from Friday's closing value of 6.9640. The yuan may locate support around the 7.1 mark.

The People's Bank of China set today's central parity rate of the yuan at 6.9718 per dollar, compared to Friday's rate of 6.9681. The Chinese central bank sets central parity rate every morning and allows the yuan to fluctuate up to 2 percent from that level.

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