Offshore Yuan Rebounds on Softer Greenback
The offshore yuan strengthened to approximately 7.26 against the dollar on Thursday, recovering from a three-week low experienced in the previous session, buoyed by a declining US dollar. The greenback's weakness emerged amid increasing concerns about a decelerating US economy and rising trade tensions. US President Trump recently announced the imposition of a new 25% tariff on all imported vehicles, which, along with retaliatory tariffs from trading partners, is scheduled to be implemented next week. In China, the central bank created buzz earlier this week by indicating a change in its monetary policy approach. It announced its intention to prioritize the seven-day reverse repo rate over the medium-term lending facility (MLF) rate and introduced a novel bidding system for MLF loans. Furthermore, the People's Bank of China is set to issue 450 billion yuan in one-year MLF loans and has suggested the possibility of rate cuts when appropriate.
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