The offshore yuan weakened toward 7.18 per dollar on Friday, extending losses from the previous session, as optimism over renewed US-China trade talks failed to lift sentiment. President Trump and China’s Xi Jinping spoke on Thursday and agreed that officials from both sides would soon resume negotiations aimed at ending the trade war, though no concrete details were provided. Analysts noted that despite the renewed dialogue, tensions remain elevated and risks of further escalation persist amid limited substantive progress. Adding pressure, recent data showed that China’s composite PMI dropped to a 2-1/2-year low in May, marking the first contraction in private sector activity since December 2022. Investors now await a batch of key economic data—including consumer and producer prices and trade figures—amid persistently weak domestic demand and continued uncertainty over US tariffs.