23.09.202502:33:36UTC+00Offshore Yuan Holds Firm Near 10-Month Peak

The offshore yuan held steady around 7.11 per dollar on Tuesday, maintaining its position near the highest level seen since early November of the previous year. This stability is attributed to a weakened US dollar, as market participants assessed the People’s Bank of China's (PBOC) monetary policy strategy. Analysts predict continued pressure on the dollar following the Federal Reserve’s initiation of a new rate-cutting cycle last week, which has bolstered the yuan along with a strong stock market. Market expectations now suggest nearly two additional 25 basis points rate cuts this year, as the Fed hinted at further easing due to labor market challenges. Domestically, PBOC Governor Pan Gongsheng stated on Monday that China's monetary policy will remain data-driven with a focus on supporting economic recovery, committing to using a variety of tools to maintain liquidity and reduce funding costs. These remarks came as the central bank left its key policy and lending rates unchanged for the fourth consecutive month. Meanwhile, traders are also monitoring developments in Sino-US trade discussions, with Presidents Trump and Xi scheduled to meet in six weeks in South Korea.