Offshore Yuan Hovers Near 10-Month Highs

The offshore yuan weakened slightly toward 7.13 per dollar on Monday, but stayed close to its highest level in almost ten months, as traders weighed mixed signals from economic and geopolitical fronts. On the data side, China’s factory activity returned to growth, rising to 50.5 in August 2025 from July’s 49.3 and above forecasts of 49.5, marking the strongest reading since March. Output expanded as new orders and purchasing activity picked up, while the contraction in foreign demand eased, though the rebound was only modest. Meanwhile, global sentiment was shaped by a US federal appeals court ruling that most of Trump’s reciprocal tariffs were illegal, with judges holding that he had exceeded his authority in imposing sweeping levies announced on April 2. Markets also tracked developments in India-China ties, after leaders from both countries reaffirmed they are partners in development rather than rivals during a two-day SCO summit, where President Xi is expected to deliver remarks.