FX.co ★ Offshore Yuan Pauses Amid Mixed Data

The offshore yuan held steady around 7.17 per dollar on Tuesday, as it paused its gains for the second consecutive session. Investors were absorbing a blend of mixed economic data from China. Although GDP grew by 5.2% in the second quarter, slightly surpassing expectations, this was a slowdown from the 5.4% growth seen in the previous quarter. The industrial output exceeded predictions, lending some support, but lackluster retail sales and disappointing investment statistics indicated inconsistent domestic demand. Ongoing deflationary pressures and the fragile US-China trade truce heightened concerns, leading to expectations for additional stimulus from Beijing. Reports of no significant progress on sensitive issues such as military-use rare earths highlighted the uncertainties in US-China relations. At the same time, President Trump expressed a willingness to engage in further tariff negotiations with the European Union and other major partners, following his announcement of a proposed 30% tariff on imports from the EU and Mexico, which is set to take effect in August.