China's yuan eases after Trump-Xi meeting, but exports underpin further strength

Business Recorder reported that China's yuan dipped against the dollar on Monday, trading at 6.7142 in late-morning dealings, 0.03% below the earlier session's finish. The dollar index edged up to 101.09, close to a two-month high. The softer currency came as attention turned from Xi Jinping's Washington visit to underlying economic conditions.

The United States and China agreed to lower duties on goods worth $30 billion in each direction and to start a dialogue on artificial intelligence, once Xi completed his three-day American visit. Fresh figures released the same day showed China's industrial profit growth decelerated again in August. Analysts still expect the yuan to keep rising, though at a gentler rate, because exports remain strong.

Huatai Futures said trade and geopolitical issues have receded for the moment, while climbing US Treasury yields could limit the currency's gains. COFCO Futures expected firm exports to support the yuan in the fourth quarter, but flagged risks from a wider US-China yield gap and shifting overseas demand. The People's Bank of China set the midpoint at 6.7399 per dollar before trading opened, the firmest since February 3, 2023.