SHANGHAI: China’s yuan was largely steady against the dollar on Friday as investors stood sidelined awaiting more clarity on US President Donald Trump’s trade policy following conflicting court rulings on his sweeping tariffs.
A federal appeals court temporarily reinstated the most sweeping of Trump’s tariffs on Thursday, a day after a US trade court ruled that he had exceeded his authority in imposing the duties and ordered an immediate block on them.
As of 0327 GMT, the yuan was 0.02% higher at 7.1853 per dollar, while its offshore counterpart was up about 0.06% in Asian trade to 7.1858.
The Chinese currency looked set for a monthly rise, after Washington and Beijing earlier this month agreed to roll back most of the tariffs imposed on each other’s goods since early April, in an effort to avoid a full-blown trade war.
However, US trade talks with China were “a bit stalled” and getting a deal over the finish line would likely need the direct involvement of Trump and Chinese President Xi Jinping, US Treasury Secretary Scott Bessent said on Thursday.
Some currency traders expect the yuan to stay rangebound trading for the time being.
“Tariff developments are likely to be zigzag, and ‘de-dollarisation’ is expected to persist,” said a trader at a foreign bank.
“Pressure on the yuan should be expected based on the comprehensive asset inflows into the country in recent weeks alone, and we also stress that fundamentals do not support excessive yuan appreciation as risks to price pressures remain to the downside,” Geoff Yu, EMEA macro strategist at BNY Mellon, said in a note.
Prior to the market opening, the People’s Bank of China (PBOC) set the midpoint rate at 7.1848 per dollar, 11 pips firmer than a Reuters’ estimate of 7.1859. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.