According to Morgan Stanley, American hedge funds significantly increased their bullish positions on Chinese stocks last week, driven by optimism surrounding ongoing trade negotiations between the U.S. and China. This shift marks a renewed interest in Chinese equities, particularly as key stock indices like the MSCI China Index and the CSI 300 Index recorded notable gains in anticipation of these pivotal talks.

The U.S. dollar maintained a narrow trading range on Wednesday, reflecting a delicate balance of anticipation and uncertainty ahead of a key Federal Reserve meeting. Investors appeared reluctant to take strong positions as the Fed weighs its next move amid a still-fragile economic outlook. Simultaneously, Asian institutional investors continued divesting from U.S. assets, putting mild downward pressure on the greenback.