CHINA: How far will the central bank go to resist renminbi appreciation?

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The renminbi posted its largest quarterly gain against the US dollar in 12 years, but on a trade-weighted basis, recent renminbi gains are less remarkable. The phase one trade deal appears safe for now, and market participants appear unconcerned by US-China tensions on other issues. Large-scale Chinese currency devaluation is unlikely, but the central bank has signaled a willingness to "lean against the wind" to restrain excessive appreciation. The renminbi closed on 14 October at its strongest closing level against the US dollar since April 2019, driven by a large trade surpl