FX.co ★ Offshore Yuan Steadies on Mixed PMI Data

The offshore yuan stabilized at approximately 7.13 per dollar on Tuesday, halting after two consecutive sessions of gains as investors evaluated the latest PMI data, which presented mixed signals regarding China's economic condition. According to the official survey, there was a slower contraction in manufacturing activities, achieving the best result since March. However, it still indicated persistent weaknesses as factories face limited domestic demand and pressures from elevated U.S. tariffs. Meanwhile, services activity experienced a slight decline, and the overall composite index remained steady, suggesting an uneven recovery trajectory. On the other hand, the private RatingDog survey reported moderate growth in manufacturing activities, the strongest since May, hinting at some resilience among smaller and export-oriented firms. These mixed signals underscored the challenges confronting China’s economy, as policymakers carefully implement targeted measures to boost demand. They remain cautious about initiating large-scale stimulus actions, despite enduring challenges from sluggish consumption and trade frictions.