The offshore yuan strengthened to around 7.16 per dollar on Monday, recouping losses from the previous week, as the latest PMI data reinforced expectations of further stimulus measures. Official data showed China’s manufacturing PMI edged up to 49.7 in June from 49.5 but remained in contraction for a third straight month. The non-manufacturing PMI also rose slightly to 50.5, indicating tepid growth in services and construction. These figures underscore the gradual and uneven pace of China’s economic recovery, bolstering bets on additional stimulus from Beijing. This aligns with Premier Li Qiang’s recent address at a key economic forum, where he emphasized efforts to boost domestic demand amid persistent deflation. A weaker US dollar also supported the yuan amid Fed easing bets. Meanwhile, renewed trade talks with Washington offered cautious optimism, though concerns remain over key details. Markets now await Tuesday’s Caixin PMI data for further insight into private-sector momentum.
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