Offshore Yuan Snaps 3-Session Losing Streak
The offshore yuan appreciated to approximately 7.20 per dollar on Wednesday, halting a three-day decline, buoyed by the weakening US dollar. The dollar faced increased pressure after President Donald Trump was unable to gain backing from crucial Republican members for his comprehensive tax reform proposal, compounded by Moody's recent downgrade of the US sovereign credit rating. In an effort to bolster economic growth and mitigate the effects of rising trade tensions, the People's Bank of China, during its May 2025 meeting, lowered its key lending rates for the first time in seven months. The central bank cut the one-year loan prime rate (LPR) by 10 basis points to 3% and similarly reduced the five-year LPR to 3.5%. These rate cuts, anticipated by markets, brought both benchmarks to new historic lows and followed the broader monetary easing measures implemented earlier this month.
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