Societe Generale analysts report that the Chinese Yuan has strengthened to its highest level since February 2023, with USD/CNY trading below 6.80 ahead of the upcoming US–China summit [1]. This appreciation is attributed to increased safe-haven demand for the Yuan amid ongoing geopolitical and energy market volatility, as well as robust foreign trade data [1]. Specifically, China's exports rose by 14.1% year-over-year, pushing the trade surplus to $84.82 billion in April [1].
The summit, which will feature a visit from former US President Trump, is expected to yield only incremental outcomes, with the agenda focusing on trade discipline and limited confidence-building measures [1]. The CEO delegation accompanying Trump is notably smaller than in 2017, and invitations were sent out late, reflecting internal policy divisions in the US [1]. Discussions are likely to include requests from China for relief from US technology export controls and greater policy certainty, while the US is expected to maintain its current stance [1]. Other topics may include Iran and China's rare earth exports [1].
Commercial negotiations may center on narrow, symbolic deliverables, such as a potential Boeing aircraft order, indicating that any progress will be modest and not indicative of a broader reset in US–China relations [1].
CONCLUSION
The Chinese Yuan's recent strength is underpinned by safe-haven flows and strong trade data, but expectations for the US–China summit remain low. Market participants should anticipate only incremental policy changes and symbolic commercial agreements, with no major breakthroughs expected.