FX.co ★ Offshore Yuan Hits Near 2-Month Low

The offshore yuan fell below 7.21 per dollar on Friday, reaching its lowest point in almost two months, as it steered towards a notable weekly downturn. The decline in market sentiment came on the heels of US President Trump's announcement of a 10% baseline global tariff, along with targeted reciprocal duties reaching up to 41% for countries lacking trade agreements with the US. In addition, a 40% tariff was imposed on goods suspected of being rerouted via third countries to evade existing levies. Concurrently, the US and China completed a third series of trade negotiations this week. According to Treasury Secretary Scott Bessent, the talks were showing promising potential for a trade agreement, with a looming deadline of August 12 for both nations to decide on prolonging the current suspension of tariffs. On the Chinese front, both private and official surveys reflected a contraction in the manufacturing Purchasing Managers' Index (PMI) for July, with official data showing the sharpest drop in six months. These indicators suggest a decline in demand and a downturn in economic momentum as the third quarter begins, following substantial growth during the first half of the year.