Chinese yuan rallied in Asian session after weekend reports signaled tangible progress toward a new U.S.–China trade framework. Senior economic officials from both countries agreed on the broad outline of a deal that could be finalized when Presidents Donald Trump and Xi Jinping meet later this week at the APEC summit in Gyeongju, South Korea. The accord aims to extend the existing tariff truce and suspend China’s planned rare-earth export controls, easing one of the key geopolitical risks that has hung over markets for weeks.
U.S. Treasury Secretary Bessent described the outcome of the fifth round of talks as “a very successful framework” for the leaders to discuss on Thursday, noting optimism that the tariff pause beyond its November 10 expiry is all but assured. He added that China is expected to resume substantial purchases of U.S. soybeans, ending a complete halt in September when Chinese buyers turned to Brazil and Argentina.
Bessent also said Beijing plans to delay by a year the rollout of its rare-earth licensing regime while the policy is reviewed. That concession effectively removes a major supply-chain concern for U.S. manufacturers in the short term.
Trump reinforced the upbeat sentiment, telling reporters he believes “we’re going to have a deal with China.”
The positive momentum coincided with stronger domestic data from China. Industrial profits surged 21.6% yoy in September, accelerating from 20.4% in August and marking the fastest pace since late 2023. The data lent further support to Chinese assets and Yuan, reinforcing the perception that policy stimulus and improving export volumes are feeding through to corporate earnings.
Technically, USD/CNH’s gap-down move today confirmed renewed downside momentum. The rejection by 55 D EMA (now at 7.1532) indicates the corrective bounce from 7.0843 has ended, with sellers regaining control. Break below 7.0843 would resume the broader downtrend from the April high of 7.4287 toward 61.8% projection of 7.2239 to 7.0843 from 7.1532 at 7.0669 next.
