Published Mon, Feb 9, 2026 · 04:12 PM
[SHANGHAI] China’s renminbi edged higher to a fresh 33-month high against the US dollar on Monday (Feb 9), after a report that regulators have advised financial institutions to curb their US Treasury exposure, while the greenback weakened on rate cut expectations.
Chinese regulators have asked financial institutions to rein in their holdings of US Treasuries and instructed those with high exposure to pare down their positions due to concern over concentration risk and market volatility, Bloomberg News reported, citing unnamed sources.
The onshore renminbi strengthened to as much as 6.9284 per US dollar, the strongest level since May 11, 2023.
“News about China urging banks to curb US Treasuries exposure pushed spot a tad lower,” analysts at UBS said in a note, referring to the US dollar versus the renminbi.
“The move is framed around diversifying market risk, rather than anything to do with geopolitical manoeuvreing or a fundamental loss of confidence in US creditworthiness,” they added.
Sentiment was also aided by a stronger guidance rate and data showing China’s foreign exchange reserves rose more than expected in January.
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The renminbi has gained for 11 straight weeks in its longest winning streak since early 2013, helped by US dollar weakness, China’s resilient exports and the growing appeal of China’s capital markets.
“Improved sentiment on China’s growth outlook, greater policy tolerance for CNY strength, and significant FX undervaluation has reinforced expectations for further CNY appreciation,” Goldman Sachs said in a report, using the renminbi’s official name.
Prior to the market’s open on Monday, the People’s Bank of China set the midpoint rate – around which the renminbi is allowed to trade in a maximum 2 per cent band – at 6.9523 per US dollar, the strongest since May 16, 2023.
The US dollar index dipped 0.1 per cent in Asian trade on Monday, following Friday’s 0.3 per cent drop, as a two-week rebound lost steam.
San Francisco Federal Reserve president Mary Daly said on Friday she thinks one or two more interest rate cuts may be needed to counteract weakness in the US labour market. Lower rates could reduce the greenback’s appeal.
Traders were also encouraged by official data showing China’s foreign exchange reserves, the world’s largest, rose to US$3.399 trillion last month, exceeding the US$3.372 trillion forecast in a Reuters poll.
Goldman expects the renminbi to appreciate gradually, strengthening to 6.7 per US dollar in 12 months.
“The macro impact of currency strength is likely moderating over time,” the Wall Street bank said, citing China’s shift towards higher-tech and higher value-added exports, and Chinese exporters’ embrace of forex hedging tools. REUTERS
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