FX.co ★ Offshore Yuan Hits 2-Month Low

The offshore yuan weakened to approximately 7.33 per dollar, marking its lowest value in two months, as escalating trade tensions heightened the anticipation of further policy easing measures. Beijing has indicated there is significant scope to reduce borrowing costs and reserve requirements, reacting to the latest wave of tariffs imposed by US President Trump. As markets prepare for intensified trade disruptions, especially after China's announcement of a 34% tariff on all US imports beginning April 10, which includes export restrictions on rare earths, the yuan remains under substantial pressure. Furthermore, Beijing has added 16 American firms to its export control list and has designated 11 additional companies as "unreliable entities." To mitigate the economic impact, discussions are underway regarding fiscal measures that might include the issuance of special treasury bonds. With US tariffs projected to affect nearly all Chinese exports by at least 54%, the future of China's trade balance remains uncertain.