FX.co ★ Offshore Yuan Stabilizes

The offshore yuan steadied at approximately 7.12 per dollar on Monday, after experiencing a two-day decline. This development comes as investors mull over lackluster factory activity data alongside recent US-China trade progress. A private survey revealed that China's manufacturing Purchasing Managers' Index (PMI) declined more than anticipated in October. This follows official reports indicating that manufacturing activity has been contracting for the longest period in over nine years. The disappointing figures may stir calls for more robust policy intervention, despite China securing a trade truce with the US. Over the weekend, the White House announced that, as part of an agreement, China would lift new export restrictions on rare earths and cease investigations into US semiconductor companies. In return, Washington agreed to suspend certain tariffs and cancel a planned 100% tax on Chinese exports. This announcement is subsequent to the Trump-Xi summit, which was intended to stabilize the bilateral relationship.