On Monday, the offshore yuan strengthened to approximately 7.11 per dollar, marking its highest point in four weeks. This rise was driven by optimism surrounding the progress in US-China trade negotiations. Following two days of discussions in Malaysia, officials from both nations reached a preliminary consensus on key matters, including export controls, fentanyl trafficking, agricultural trade, and shipping tariffs. The positive developments have fueled hopes that Presidents Donald Trump and Xi Jinping may conclude an agreement during their upcoming meeting in South Korea later this week.
Further boosting the outlook, China's industrial profits demonstrated a significant increase of 21.6% year-on-year in September, achieving the fastest growth rate since November 2023. For the period from January to September, profits rose by 3.2%, marking the first cumulative gain of the year and indicating a gradual corporate recovery.
Concurrently, global markets are attentively monitoring the impending Federal Reserve's decision on interest rates. Following softer-than-anticipated US CPI data last Friday, traders are now almost entirely anticipating a 25-basis-point rate cut later this week.
