CNY: Policy-guided strength and global role – DBS

DBS strategist Philip Wee notes that China continues to guide the CNY stronger even after the first US‑China tariff truce, with USD/CNY breaking below 7.00 and trading firmer within its band. With the tariff truce extended to November 2026, Beijing is prioritizing CNY’s credibility and internationalization, including Digital CNY and CIPS, over pure export competitiveness.

Stronger currency and rising internationalization

"China did not stop guiding the CNY stronger after the first US-China tariff truce in April 2025."

"USD/CNY broke below 7.00 in January, following its decline below its daily fixing in December 2025."

"With the truce extended to November 2026 and Presidents Trump and Xi set to meet four times this year, Washington and Beijing are managing their rivalry."

"While Trump is focused on the November midterm elections, President Xi is focused on the 15th Five-Year plan and his goal for the CNY to become a strong and credible global reserve currency widely used in international trade, investment, and foreign exchange markets."

"Overall, CNY will focus less on export competitiveness and more on enhancing credibility for the opening and deepening of capital markets."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)