The offshore yuan weakened to around 7.28 per dollar, reversing a strong 1.1% gain from the previous session, as the US dollar rebounded following news of President Trump’s trade policies. During his inaugural address, President Trump proposed 25% tariffs on Mexico and Canada and hinted at stricter tariffs on China. He stated that tariffs on China might depend on a deal regarding TikTok's ownership, while also extending TikTok’s US operations for 75 days. Meanwhile, the yuan found support in hopes of potential US-China negotiations, as Trump reportedly expressed interest in traveling to China after taking office. Additionally, President Xi Jinping urged policymakers to implement more proactive macroeconomic policies this year to sustain growth momentum. The People's Bank of China kept its key lending rates unchanged in January, maintaining the one-year Loan Prime Rate (LPR) at 3.1% and the five-year LPR at 3.6% to support economic stability amid external uncertainties.
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