FX.co ★ Offshore Yuan Extends Losses

The offshore yuan continued its decline, nearing 7.18 per dollar on Friday, building on losses from the previous day. This downward trend persisted despite optimism surrounding the revival of trade negotiations between the United States and China, which failed to bolster market sentiment. After discussions on Thursday, President Trump and China's Xi Jinping agreed that officials from both countries would soon restart negotiations to address the ongoing trade war. However, no concrete details emerged from these talks. Analysts pointed out that, although dialogue has resumed, tensions remain high, and the possibility of further escalation looms in the face of limited substantial progress. Furthermore, recent data indicated that China's composite PMI fell to a two-and-a-half-year low in May, representing the first contraction in private sector activity since December 2022. Investors are now looking ahead to a series of crucial economic reports—including those on consumer and producer prices as well as trade figures—amidst ongoing weak domestic demand and prevailing uncertainty over US tariffs.