The offshore yuan depreciated past 7.14 per dollar on Wednesday, marking its third consecutive session of losses as market sentiment remained sour amid growing geopolitical risks following remarks by President Xi Jinping. Speaking at the “Victory Day” parade, Xi issued a stark warning that the world faces a critical choice between “peace or war” and “dialogue or confrontation.” At the same time, he pledged to strengthen China’s military capabilities. His remarks followed a post by US President Donald Trump, who urged Xi to credit America for China’s wartime freedom and accused Beijing of conspiring against Washington, further straining US-China relations. Meanwhile, the yuan’s decline was partially cushioned by upbeat PMI data. A private survey showed that China’s Composite PMI rose to a nine-month high of 51.9 in August 2025, as manufacturing activity improved to a five-month high (50.5 vs 49.5), while the services sector further strengthened to a more than one-year high (53 vs 52.6).
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