The offshore yuan traded to around 7.18 per dollar on Tuesday, holding its three consecutive session of gains, as upbeat services data and a firmer PBOC fix helped boost sentiment. The Caixin China General Services PMI jumped to 52.6 in July, the highest since May 2024 and well above forecasts of 50.2, signaling renewed strength in the services sector. Supporting the currency further, the PBOC set the USD/CNY midpoint at 7.1366, slightly stronger than Monday’s 7.1395 and continuing its recent pattern of firm fixes against market estimates. The central bank allows the spot rate to trade within a 2% band around the daily reference. Meanwhile, with the Politburo offering no major new stimulus at its July meeting, investor focus now turns to upcoming trade and inflation data this week for clues on China’s economic outlook. According to UBS, any additional policy support in H2 is expected to be modest and data-driven, likely timed around a more pronounced slowdown in growth into Q3 or Q4.
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