USD/CNY: US-China trade talks set for 3 months; tariff truce extended

USD/CNY remains stable near 7.2350 following news that US and Chinese trade officials will meet within three months to discuss economic relations. Treasury Secretary Bessent confirmed the 90-day tariff truce extension, preventing immediate duty escalations between the world's two largest economies. The agreement temporarily removes a major risk factor for emerging market currencies and global trade flows. Bessent revealed that President Xi has invited Trump for a meeting, though no date is set and acceptance remains pending. Crucially, existing tariffs will remain until China demonstrates progress on fentanyl control, maintaining some pressure on the yuan. The offshore yuan (CNH) shows limited reaction, trading flat at 7.2380. Asian currencies broadly benefit from reduced trade war risks, with USD/KRW down 0.2% and USD/SGD slipping 0.1%. Markets await concrete policy details from the upcoming trade discussions.