China's yuan advances to near one-year high as Trump and Xi meet
SHANGHAI, Oct 30 (Reuters) - The yuan advanced to a near one-year high against the dollar on Thursday, underpinned by investor hopes that U.S. and Chinese leaders reached a trade truce at their meeting in South Korea.
U.S. President Donald Trump and China's leader Xi Jinping met for nearly two hours. Both sounded optimistic about cooling trade tensions heading into the meeting but neither side has yet released details of the talks.
The currency "could be part of the trade talks or at least a way to relieve some pressure in terms of the potential U.S. concern when it comes to trade discussions," said Jeremy Zook, lead analyst for China at Fitch Ratings.
The onshore yuan CNY=CFXS strengthened to a high of 7.0955 per dollar, the loftiest level since November 4, 2024, before fetching 7.0966 as of 0415 GMT. Its offshore counterpart CNH=D3 traded at 7.0959 as of 0415 GMT.
Meanwhile, in the equity market, Chinese stocks edged up, with the Shanghai benchmark climbing to a decade high, fueled by cautious optimism for a potential trade-war truce that will help sustain bullish market sentiment. .SS
Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.0864 per dollar, 21 pips weaker than the previous fixing but 192 pips firmer than a Reuters' estimate CNY=RTRS of 7.1056. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.
The spot market largely shrugged off the official guidance, which reflected broad dollar strength overnight in global markets as the Federal Reserve lowered interest rates as expected, though Chair Jerome Powell signaled it may be the last reduction this year.
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