The offshore yuan edged lower to around 7.14 per dollar on Tuesday, trading within a narrow range as investors monitored signs of easing US-China trade tensions. US Treasury Secretary Scott Bessent said Monday that President Trump remains on course to meet Chinese President Xi Jinping in South Korea later this month as both nations seek to defuse tensions over tariffs and export controls. However, market concerns lingered over whether the countries could finalize a lasting trade arrangement. Meanwhile, China’s commerce ministry defended its rare earth export measures, noting the US had been given advance notice and emphasizing that the restrictions are aimed at safeguarding national security, not imposing a ban. The PBOC also continued to support the yuan through stronger midpoint guidance, cushioning the impact of trade tensions. Looking ahead, investors will closely watch China’s upcoming inflation report, expected to show a modest year-on-year contraction and a slight monthly gain.
