FX.co ★ Offshore Yuan Dips on Stronger Dollar

The offshore yuan experienced a minor depreciation, settling around 7.30 against the dollar. This movement was primarily influenced by a strengthening US dollar, as investors braced themselves for forthcoming significant economic reports that may impact the Federal Reserve's monetary policy decisions. Additionally, attention is focused on trade relations, following US President Trump's indication that a delay in reciprocal tariffs was improbable. Recently, the US and China appeared to be easing tensions, with Trump expressing a willingness to reduce tariffs and China opting to exempt certain imports from its hefty 125% tariffs. However, Beijing rebuffed claims of ongoing trade discussions, despite Trump's assertions of progress. In the backdrop, Chinese manufacturers are suspending production and exploring alternate markets due to enduring US tariffs hampering exports. On a positive note, industrial profits saw a resurgence in the first quarter, instilling some optimism for the yuan. Investors now anticipate a pending press conference, as China’s Finance Minister, Lan Fo’an, advocated for more assertive macroeconomic policies over the weekend to bolster growth.