Offshore Yuan Slips
The offshore yuan depreciated to approximately 7.21 per dollar on Wednesday, ending a three-day upward trend as investors maintained a cautious outlook pending further developments in US-China trade relations. Earlier in the week, President Trump revealed that China had agreed to remove non-tariff barriers on American goods. This announcement followed a temporary trade ceasefire reached over the weekend in Switzerland, whereby both nations agreed to pause most tariffs for 90 days. Under this agreement, the US reduced tariffs on Chinese imports from 145% to 30%, while China lowered its tariffs on US goods from 125% to 10%. However, uncertainty persists regarding the actions to be taken once the 90-day period concludes, with further negotiations anticipated in the upcoming weeks. Domestically, recent data indicated that China's annual inflation rate decreased for the third straight month, reaching 0.1% in April, while producer prices fell by 2.7%, the steepest drop in six months.
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