Offshore Yuan Firms After Trade Truce Extended

The offshore yuan edged higher around 7.19 per dollar on Tuesday, halting two straight sessions of losses, after the US and China agreed to extend their tariff truce by 90 days. The move, signed by President Trump on Monday, delays steep duty hikes until mid-November, keeping US tariffs on Chinese goods at 30% and Chinese tariffs on US goods at 10%, instead of a steep 145% and 125%, respectively—a scenario that could have amounted to a near trade embargo. The delay offers relief to exporters and retailers ahead of the holiday season and preserves lower rates on key imports. Sentiment was further lifted by news that Nvidia and AMD agreed to give up 15% of their China chip revenue to the US government in exchange for restored market access. Meanwhile, Chinese exporters sold a record $132.5 billion in dollar-yuan options in H1 2025, reflecting strong hedging that helped stabilize the currency. Elsewhere, traders now await US CPI data that could reinforce bets of a more dovish Fed stance.