The offshore yuan weakened toward 7.18 per dollar on Thursday, snapping a two-session wining streak, as investors weighed disappointing PMI data and the ongoing US-China trade tensions. A private survey showed that China’s composite PMI fell to a 2-1/2-year low in May 2025, marking the first contraction in private sector activity since December 2022. The decline was driven by the weakness in manufacturing, which overshadowed resilience in the services sector. Adding to the pressure on the yuan were growing uncertainties in US-China relations. President Donald Trump sees direct talks with Chinese President Xi as essential to stopping the trade and technology dispute from escalating. However, Xi insists on meaningful concessions first—a firm stance that has become a growing source of frustration for Trump. At the same time, tensions further escalated due to China's reluctance to relax rare earth exports limits and its accusation that the US is blocking access to advanced technologies.