The offshore yuan edged lower below 6.98 per dollar, but remained near its highest level since May 2023, as investors assessed the latest PMI figures for signs on the country’s economic outlook. A private survey showed China’s composite PMI remained expansionary for the seventh straight month, though services activity recorded its softest growth in six months. Meanwhile, official data released last week showed the composite PMI climbed to a six-month high, with manufacturing activity unexpectedly returning to expansion and the services PMI rising to a four-month peak. Markets now look ahead to upcoming trade balance and GDP figures this month for further clues. President Xi Jinping stated that the economy is on track to achieve around 5% growth in 2025. Elsewhere, the US dollar strengthened as investors focused on a slate of data due this week that could be crucial for the Fed’s policy outlook. A recent run of resilient US data has markets expecting slower interest rate cuts this year.
