China's yuan eases amid softer guidance rate, growing tensions with Europe

Business Recorder reported that the yuan softened against the US dollar on Wednesday after the People's Bank of China set its daily reference rate weaker than expected. The fixing was the first downward move in eleven sessions, ending a run of ten consecutive stronger settings. Around midday the onshore yuan traded at 6.7050, about 0.07% weaker than the prior close, following a midpoint of 6.7468 set before the market opened.

The yuan had gained steadily in the run-up to the meeting between US President Donald Trump and Chinese leader Xi Jinping, yet the central bank is wary of a rapid rise. Andrew Baston, China research director at Gavekal Dragonomics, said the export surge is showing signs of peaking, which could raise concern about shipments. Oxford Economics said the planned Washington meeting on September 24 points to more predictable US-China ties, and the key question is whether the leaders will extend last year's trade truce.

Trade tensions with Europe are also rising, as the European Central Bank said China's industrial changes are pushing European companies out of global markets, with German firms among the worst affected. Fitch trimmed its 2026 growth outlook for China to 4.5%, a cut of 0.1 percentage point, and expects only moderate yuan appreciation in 2027 and 2028.