USD/CNH falls as China stocks surge on US-China trade optimism

USD/CNH has weakened 0.5% to 7.2850 as the Hong Kong Hang Seng Index surged 1.4% to its highest level since March, driven by renewed optimism surrounding US-China trade negotiations. Risk appetite improved significantly after President Trump expressed confidence about upcoming talks, stating "The meeting should go very well." Deputy trade negotiators are scheduled to meet in London starting Monday, with discussions potentially extending throughout the week. The positive sentiment initially boosted US equities on Friday, with Asian markets now following suit. Technical indicators show USD/CNH approaching key support at 7.2750, with a break below potentially accelerating yuan strength toward 7.2500. The improved trade outlook has reduced safe-haven demand for the dollar while supporting risk-sensitive Asian currencies. Traders should monitor the London meetings closely, as concrete progress could further pressure USD/CNH lower.