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(Bloomberg) -- The yuan advanced alongside assets sensitive to China’s economy, amid signs that President Donald Trump is dialing back threats of slapping higher tariffs on exports there.

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The Chinese currency rallied to the strongest in six weeks in both onshore and overseas trading, after Trump said in an interview with Fox News that he would rather not have to use tariffs against the world’s second-largest economy. The Australian and New Zealand dollars both gained more than 0.5%, while benchmark Treasury yields edged lower.

In the equity market, the Hang Seng China Enterprises Index jumped more than 2%.

Since Trump’s inauguration investors have mostly focused what he did on trade and less on what he said, cautiously optimistic after his first days did not bring the sweeping new levies he’d promised in his campaign. The dollar has weakened with the yuan higher as traders concluded a floated 10% tariff on Chinese exports was a far cry from the 60% previously mentioned.

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“Trump continues to take a softer approach with China at this point after issuing the executive order to delay the ban on TikTok and suggesting a mere 10% tariff earlier this week,” said Fiona Lim, a senior strategist at Malayan Banking Bhd. “Markets are likely to reduce bets on tariffs right now.”

Trump’s softer tone is good news for the People’s Bank of China, which has been digging deeper in its policy toolkit this month to put a floor on the falling yuan. Just this month, it deployed stronger-than-expected daily reference rates, tweaked some capital controls and engineered a liquidity squeeze to deter bears.

Still, some warn that the market will be volatile given unpredictability in Trump’s policies. He said earlier this week that the US may enact 25% tariffs on Mexico and Canada in February, right after he sidestepped offering details on the scope of new tariffs he has threatened at the inauguration address.

And Chinese assets remain under pressure due to fears over a prolonged economic slowdown and a yawning interest-rate discount to the US. Traders have grown increasingly disappointed at Beijing’s piecemeal stimulus efforts and the MSCI China Index entered a bear market this month.