USD/CNY falls as China-US talks ease trade tensions on rare earth exports

USD/CNY declined 0.2% to 7.2850 following positive developments from China-US talks in London, where both nations agreed to ease trade restrictions. China confirmed it will approve export applications for controlled items, particularly rare earth minerals crucial for technology manufacturing, while the US will lift corresponding restrictive measures against Chinese entities. The agreement represents a significant de-escalation in trade tensions that have pressured the yuan throughout 2025. Market participants view this as a gesture of goodwill that could stabilize bilateral trade flows and reduce supply chain disruptions. The yuan's appreciation accelerated during Asian trading hours as investors priced in improved trade relations. Technical indicators show USD/CNY facing immediate support at 7.2800, with potential for further declines toward 7.2500 if positive momentum continues. Traders should monitor upcoming trade data and any additional policy announcements from both nations for directional cues.