THE yuan jumped to a two-month high against the U.S. dollar yesterday, boosted by signs of progress in Sino-U.S. trade negotiations that raised hopes for an end to the long trade dispute.

Both onshore and offshore yuan strengthened more than half a percent in morning trade, a dramatic move for a currency that usually wavers in a wafer-thin range.

U.S. President Donald Trump on Friday outlined the first phase of a deal to end a trade spat with China and suspended a threatened tariff hike, though officials on both sides said much more work needed to be done.

“China and the United States managed to reach the substantial phase one trade deal, offering a respite for investors worrying about the outbreak of full-blown war,” said Ken Cheung, chief Asian forex strategist at Mizuho Bank in Hong Kong.

The onshore spot market opened at 7.0827 per dollar and jumped to a high of 7.0494 at one point in morning trade, the strongest since Aug. 19. As of midday, the spot rate was changing hands at 7.0517, 373 pips stronger than the previous late session close.

Several traders said whether gains in the yuan will be sustained depends largely on developments in trade negotiations in the near term. (SD-Agencies)