The offshore yuan strengthened to around 7.18 per dollar, ending a two-consecutive session of losses, supported by potential easing of US-China trade tensions despite deepening deflationary concerns. Market sentiment improved as trade tensions appeared to ease between the US and China, following reports that Beijing granted temporary approvals for rare earth exports, while Boeing resumed commercial jet deliveries to China. Additionally, Chinese Vice Premier He Lifeng is set to meet US Treasury Secretary Scott Bessent and his trade team in London this week for renewed talks. Meanwhile, the yuan came under pressure as consumer prices fell for a fourth straight month and producer prices saw their steepest drop in nearly two years, underscoring persistent deflationary pressures and Beijing’s limited success in reviving domestic demand. The data raised concerns over China’s economic recovery and strengthened the case for further monetary easing amid tariff uncertainties.