SHANGHAI: China’s yuan firmed slightly against the U.S. dollar on Thursday, supported by a stronger official midpoint and upbeat trade data, which helped ease concerns over tariff-related pressures.
China’s exports beat forecasts in July, as manufacturers made the most of a fragile tariff truce between Beijing and Washington to ship goods ahead of a looming deadline later this month.
The spot yuan opened at 7.1830 per dollar and was last trading at 7.1809 as of 0244 GMT, 27 pips firmer than the previous late session close and 0.65% weaker than he midpoint.
Prior to the market opening, the People’s Bank of China set the midpoint rate at 7.1345 per dollar, its strongest since November 6, 2024, and 364 pips firmer than a Reuters’ estimate.
The PBOC has been fixing the yuan more to the stronger side as the dollar gradually climbed from a 3-year low since early July.
The spot yuan is allowed to trade a maximum of 2% either side of the fixed midpoint each day.
Meanwhile, U.S. President Donald Trump on Wednesday said he could announce further tariffs on China similar to the 25% duties announced earlier on India over its purchases of Russian oil, depending on what happens.
The yuan did not react much on the news, although Citi analysts in a note it would “likely continue facing resistance near 7.1840 per dollar, then 7.1808 near-term”.
Citi analysts said they assessed the impact of transshipment tariffs but concluded that local policymakers should primarily focus on direct U.S. tariffs, reciprocal measures, and fentanyl-related actions.
“China may also continue diversifying its supply chains, searching for new growth opportunities beyond the U.S., which, in the medium-term, could be a net benefit for local markets,” they said.
Market reaction was largely muted after Trump said it would impose a tariff of about 100% on semiconductor chips imported from countries not producing in America or planning to do so.
The deadline for the Sino-U.S. trade truce is August 12.
The offshore yuan traded at 7.1838 yuan per dollar, up about 0.01% in Asian trade.
The dollar index, which measures the greenback against major currencies was 0.071% higher at 98.25.
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