Chinese currency faced downward pressure as renewed trade tensions between China and the United States sparked market uncertainty. The yuan weakened after Beijing announced retaliatory measures against US tariffs on Chinese goods, marking another chapter in the ongoing economic dispute between the world's two largest economies.
Market sentiment remained cautious despite US President Donald Trump's statement about potential talks with Beijing leadership to resolve the trade standoff. The absence of a concrete deal by Wednesday added to investor concerns.
Meanwhile, Chinese mainland markets showed resilience as trading resumed after a week-long break. The Shanghai Composite Index rose 0.60 percent to 3,270.16 points, while Hong Kong's Hang Seng Index edged up 0.18 percent to 20,827.77 points.
Chinese tech developments provided some positive momentum, as local startup DeepSeek unveiled its new R1 chatbot, positioning it as a cost-effective alternative to US competitors. However, this failed to fully offset concerns about escalating trade tensions.
The currency movements highlight growing market sensitivity to US-China relations and their potential impact on global trade. Traders continue to monitor developments closely as both nations navigate their complex economic relationship.