The offshore yuan rose to around 7.12 per dollar on Wednesday, snapping a three-session decline, as the People’s Bank of China reaffirmed its commitment to maintaining currency stability. The central bank continued setting the daily yuan reference rate at levels notably stronger than market expectations, aiming to mitigate the broader economic and geopolitical repercussions of escalating US-China trade tensions. On the economic front, the latest inflation data pointed to continued weakness, reflected in persistent deflationary pressures. Consumer prices fell more than expected in September, though the decline moderated slightly from August. Meanwhile, producer prices remained in deflation for a third consecutive year in August, albeit at a slower pace than in July. Externally, the yuan found additional support from a weakening US dollar after Fed Chair Jerome Powell signaled openness to a potential interest rate cut at the late-October policy meeting.
