FX.co ★ Offshore Yuan Approaches 4-Week High

The offshore yuan edged higher to approximately 7.12 per dollar on Tuesday, nearing its highest point in nearly four weeks. This uptick was buoyed by steady guidance from China's central bank and indications of lessening trade tensions between the United States and China. The People's Bank of China established the daily midpoint at 7.093 per dollar, stronger than the previous fix of 7.0973 on Monday, and significantly below the market's expectation of 7.1219. This move suggests continued efforts to stabilize the currency in advance of significant political events. Optimism was further fueled by U.S. Treasury Secretary Bessent's announcement that he would meet this week with Chinese Vice Premier Lifeng to avoid further tariff escalations. Additionally, President Donald Trump expressed a desire for a "fair trade deal" during his upcoming meeting with President Xi Jinping in South Korea. Domestically, focus shifts to the Communist Party's Fourth Plenum, continuing through Thursday, which is expected to address economic and policy priorities for the upcoming years. However, more extensive policy changes are anticipated to follow December's Central Economic Work Conference.