The offshore yuan weakened to around 6.79 per dollar on Monday, erasing gains from the previous session as renewed doubts about China’s economic outlook weighed on sentiment. A private survey showed the manufacturing PMI slipping to a three-month low of 51.7 in June from 51.8 in May. That came on the heels of stronger-than-expected official data, which put the manufacturing PMI at 50.3 in June, up from 50.0 in May and above market forecasts of 50.1.
Risk appetite was further dampened by an assessment from Goldman Sachs, which highlighted a more cautious tone among domestic clients regarding China’s near-term growth prospects. The report pointed to lingering concerns over subdued consumer confidence, ongoing labor market pressures, and a protracted downturn in the property sector.
The yuan’s weakness persisted even as the People’s Bank of China set the daily midpoint at 6.8067 per dollar, its strongest fixing in more than three years. Separately, the EU trade commissioner and China’s commerce minister opened talks in Brussels aimed at easing trade tensions.