FX.co ★ Offshore Yuan Snaps 2-Day Losing Streak

The offshore yuan appreciated to approximately 7.18 per dollar, concluding two consecutive sessions of depreciation. This strength was underpinned by indications of potential easing in US-China trade tensions, despite growing concerns about deflation. Market optimism improved following reports that Beijing had granted temporary approvals for rare earth exports, and Boeing had resumed commercial jet deliveries to China. Moreover, Chinese Vice Premier He Lifeng is scheduled to meet with US Treasury Secretary Scott Bessent and his trade team in London for renewed discussions. Despite these positive developments, the yuan faced downward pressure as consumer prices continued to decline for the fourth month in a row, and producer prices experienced their most significant drop in nearly two years. These figures highlight ongoing deflationary challenges and indicate Beijing's limited progress in stimulating domestic demand. The data has intensified concerns over China's economic recovery and bolstered the argument for further monetary easing amidst ongoing tariff uncertainties.