FX.co ★ Offshore Yuan Slips for Second Session

The offshore yuan declined to approximately 7.21 against the dollar on Monday, marking its second consecutive session of losses as trade tensions reemerged. President Trump announced on Friday that the United States will increase tariffs on steel imports to 50%, effective June 4, as a measure to decrease dependence on China. Trade tensions intensified further after China accused the US of "seriously violating" the May trade truce, vowing "strong and resolute measures" to protect its interests. The dispute was reignited following Trump's allegations that China had breached the previous month’s Geneva agreement. Despite the rising tensions, Trump's adviser Kevin Hassett mentioned the possibility of discussions with President Xi "as soon as this week," though no specific timeline has been confirmed. Concurrently, the latest Chinese Purchasing Managers' Index (PMI) data indicated some stabilization, but the recovery remains fragile amidst weak domestic demand and ongoing trade issues. Official figures revealed that manufacturing rose to 49.5 from 49.0, while the composite index slightly increased to 50.4; however, the services sector slipped to a four-month low of 50.3.