Offshore Yuan Hits Near 2-Month Low

The offshore yuan weakened past 7.21 per dollar on Friday, hitting its lowest level in nearly two months and heading for a sharp weekly decline. Market sentiment soured after US President Trump announced a 10% baseline global tariff and introduced reciprocal duties of up to 41% on countries without trade deals. Moreover, he announced a 40% tariff on goods suspected of being rerouted through third countries to bypass existing levies. Meanwhile, the US and China concluded a third round of trade talks this week. Treasury Secretary Scott Bessent stated that the negotiations have “the makings of a trade deal,” with both nations facing an August 12 deadline to extend the current pause on tariffs. In China, both private and official data showed manufacturing PMI contracted in July, with the latter marking the sharpest decline in six months. The figures point to weakening demand and a loss of economic momentum entering the third quarter following a strong growth in the first half of the year.