FX.co ★ Offshore Yuan Snaps 5-Session Decline

On Thursday, the offshore yuan appreciated to approximately 7.19 against the dollar, breaking a five-day downward trend. This movement occurred as investors considered lackluster PMI data alongside a cautious optimism stemming from the latest Politburo meeting. China's official PMI figures indicated a deceleration in economic activity for July, with the composite PMI declining to a three-month low of 50.2, down from June's 50.7. Manufacturing continued to contract, dipping to 49.3 from 49.7, while the services PMI fell to 50.1 — marking its weakest point in eight months — from 50.5. Despite these subdued figures, market sentiment received a boost following the Politburo's meeting on Wednesday. The 24-member policymaking group committed to bolstering economic growth and curbing "disorderly competition," amid increasing economic pressures. However, the policymakers refrained from announcing any major stimulus packages, choosing instead to prioritize tackling the economy's overcapacity issues. For the month, the yuan is poised for its first decline after two months of consecutive gains.