The offshore yuan traded around 7.07 per USD, near its highest level since early October last year, as a broadly softer US dollar offset weak factory activity data in China. The softer greenback continued to support the currency, with investors looking ahead to a crucial month that could bring the Fed’s final rate cut of the year and the confirmation of a dovish successor to Chair Jerome Powell. Domestically, a private survey showed China’s factory activity slipping back into contraction in November, reflecting continued weakness in domestic demand. This followed official data released on Sunday showing another month of subdued manufacturing and a cooling services sector. Market participants now closely watched the yuan’s daily official fixings for hints on the PBOC’s stance as signs emerged that the central bank is aiming to temper its recent gains. Traders are also focused on next month’s Central Economic Work Conference for potential signals on the policy agenda for next year.
