FX.co ★ Offshore Yuan Holds Near 8-Month Peak

The offshore yuan maintained its upward trajectory, stabilizing around 7.16 per dollar on Tuesday, reaching its highest point since early November 2024. This was largely due to improved market sentiment following an unexpected rebound in factory activity. A private survey revealed that China's Manufacturing Purchasing Managers' Index (PMI) increased to 50.4 in June from 48.3, surpassing expectations of 49. This was bolstered by Beijing's initiatives to sustain growth in the face of elevated US tariffs. This result stood in contrast to the official PMI published on Monday, which indicated a third consecutive month of contraction, albeit with slight improvement, underscoring the resilience of export-oriented companies despite trade challenges. Concurrently, the US dollar faced pressure as speculation about potential Federal Reserve rate cuts and trade uncertainties grew, further aiding the yuan. Looking forward, significant attention is focused on anticipated decisions at China's key political gatherings, particularly the forthcoming July Politburo session, which keeps the markets vigilant regarding further yuan interventions.