CNY: Policy-guided strength and global role – DBS

FXStreet Insights Team FXStreet

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.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD strengthens above 1.3350 ahead of US CPI data

The GBP/USD pair trades in positive territory around 1.3360 during the Asian trading hours on Tuesday. However, the potential upside for the major pair might be limited amid fears of an escalating US-Iran conflict. The US June Consumer Price Index inflation report will take center stage later on Tuesday.

EUR/USD posts modest gains above 1.1350 as traders await US CPI inflation release

The EUR/USD pair posts modest gains near 1.1385 during the Asian trading hours on Tuesday. Nonetheless, the potential upside for the major pair might be limited amid renewed US military strikes against Iran. Traders will take more cues from the US June Consumer Price Index inflation data, which will be released later on Tuesday.

Gold looks to US CPI and Warsh’s testimony for the next big move

Gold is recovering a part of the previous 3% slide to two-week lows near $3,985, back above the $4,000 level in Asia on Tuesday. Gold traders brace for intense volatility on the US Consumer Price Index data release, followed by Federal Reserve Chair Kevin Warsh’s testimony.

Trump urges Senate to pass CLARITY Act as crypto bill nears crucial vote

US President Donald Trump on Monday urged the US Senate to swiftly pass the Digital Asset Market Clarity Act, following the death of Senator Lindsey Graham, who passed away unexpectedly over the weekend at age 71. "In honor of Senator Lindsey Graham, a big supporter, the US Senate should pass the CLARITY Act," Trump wrote in a Truth Social post.

Oil jumps, bonds break and the AI trade starts losing its shine

Wall Street finally ran into the collision course it had spent weeks pretending would never happen. Oil surged, bonds sold off, the dollar caught a bid, and the most crowded corner of the equity market began to buckle under its own weight.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.