China’s renminbi has strengthened modestly against the US dollar despite renewed dollar strength globally, as Beijing has faced growing European pressure over its exchange-rate policy and substantial trade surplus. Offshore USD/CNH closed Friday at 6.6930, down from 6.7064 on October 2, representing a 0.20% appreciation in the RMB. Mainland currency trading has been interrupted by China’s National Day holiday, limiting direct comparisons with the previous week. The offshore gains nevertheless suggest that investors have remained relatively confident in the currency despite broader international uncertainty.
The People’s Bank of China resumed its daily fixings on October 9, setting USD/CNY at 6.7330, compared with a Reuters market estimate of 6.7973. The stronger-than-expected fixing has indicated Beijing’s preference for limiting depreciation pressures rather than allowing the RMB to weaken alongside the dollar.
European criticism has become a significant policy issue. EU officials and German Chancellor Friedrich Merz have raised concerns that an undervalued RMB has contributed to China’s trade advantage. The PBOC responded on October 8 that China neither needed nor intended to depreciate its currency to support exports, attributing the country’s competitiveness primarily to manufacturing strength.
The RMB has also gained against the euro, with EUR/CNY falling from 7.5259 on October 2 to approximately 7.4992 on October 9, a 0.35% appreciation. Concerns over France’s public finances and higher European borrowing costs have weighed on the single currency. The yen has also remained under pressure against the dollar, reflecting uncertainty over Japanese monetary policy. These movements matter for Chinese exporters competing in European and Japanese markets, where RMB appreciation can reduce price competitiveness.
The coming week will test whether the RMB can sustain its gains as mainland markets return to normal activity. Persistent US inflation concerns and expectations of further Federal Reserve tightening could support the dollar, while European trade pressure may discourage Beijing from tolerating substantial RMB depreciation. China’s challenge has been to preserve currency stability without undermining exporters or restricting monetary policy flexibility as domestic demand remains subdued.