The Chinese yuan held steady after Fridayโs notable appreciation against the U.S. dollar, supported by growing optimism surrounding U.S.-China trade relations.
Beijingโs consideration of a U.S. offer to engage in tariff discussions has helped ease market concerns, lifting sentiment across Asian currencies.
As a result, the offshore yuan briefly rose past the 7.20 level, its strongest since November.
Despite this near-term optimism, challenges remain as tariffs continue to expose the economy to risks. To mitigate the impact, authorities have accelerated efforts to stimulate domestic demand by redirecting export-bound goods to the local market.
At the same time, policymakers have so far refrained from broad stimulus, which could weigh on the currency.
The upcoming April services PMI could affect the yuanโs near-term trajectory. While Marchโs data showed continued improvement in services activity, it also highlighted persistent labour market weakness and falling output prices. A stronger-than-expected April reading could strengthen confidence in the domestic recovery, offering support to the yuan. However, further signs of softening, especially in employment or pricing, could undermine sentiment and renew downward pressure
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