The offshore yuan remained steady around 7.11 per dollar on Tuesday, holding firm near its highest level since early November last year, supported by a pressured US dollar, while investors weighed the PBOC’s approach to monetary policy. Analysts expect the dollar to face further downside after the Fed kicked off a fresh rate-cutting cycle last week, supporting the yuan alongside a buoyant stock market. Markets now price in nearly two more 25bps cuts this year after the Fed signaled further easing amid labor market weakness. Domestically, PBOC Governor Pan Gongsheng said on Monday that China’s monetary policy will remain data-driven and focused on supporting recovery, pledging to use a range of tools to ensure liquidity and lower funding costs. The comments came as the central bank held its key policy and lending rates steady for a fourth straight month. Meanwhile, traders also watched progress in Sino-US trade talks, with Presidents Trump and Xi set to meet in six weeks in South Korea.
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