FX.co ★ Offshore Yuan Edges Higher

The offshore yuan experienced a slight increase, reaching approximately 7.19 per dollar on Friday. This movement was bolstered by the announcement that the United States and China have committed to keeping communication channels open despite ongoing tensions on several fronts. On Friday, China’s Foreign Ministry provided a brief report indicating that Vice Foreign Minister Ma Zhaoxu and US Deputy Secretary of State Christopher Landau engaged in a phone conversation on Thursday to address critical bilateral concerns. This statement was later corroborated by the US State Department. This dedication to continuous dialogue is perceived as a constructive measure for managing the enduring tensions between the two leading global economies. Domestically, China's central bank infused CNY 500 billion into the banking system through its one-year medium-term lending facility to ensure sufficient liquidity and foster credit growth amid a tentative economic recovery. Externally, the yuan's recent appreciation was additionally supported by a weakening US dollar, spurred by escalating worries over the country's worsening fiscal condition.