FX.co ★ Offshore Yuan Firms on Strong Trade Data

On Monday, the offshore yuan hovered around 7.17 per dollar, continuing a three-day upward trend from the previous week, thanks to trade data that exceeded expectations. China's trade surplus expanded to USD 114.77 billion in June 2025, surpassing predictions as exports climbed 5.8% year-on-year. This increase was largely attributed to shipments being expedited ahead of impending tariff deadlines in August. While imports rose by 1.1%, slightly below projections, they represented the first annual growth observed this year, indicating a modest rebound in domestic demand. At the same time, global trade tensions were heightened as the US confirmed a forthcoming 30% tariff on imports from the EU and Mexico, starting August 1. In reaction, officials from the EU and Mexico expressed a willingness to enter negotiations, and the EU initiated discussions with other impacted trade partners. The yuan's medium-term outlook received additional support from the announcement that China and ASEAN are set to submit an enhanced free trade agreement for approval in October. Investors are now anticipating China's Q2 GDP figures, which are scheduled for release on Tuesday, with projected growth slowing to 5.2% from the previous quarter's 5.4%.