We think that the renminbi’s appreciation has further to run

While the appreciation of the Chinese renminbi has stalled over the past week or so, we think that it will make further headway against the US dollar over the coming months. Amongst the financial market fallout from last week’s news about progress towards a vaccine against COVID-19, one of the more interesting but less remarked upon effects was a ~1% fall in the renminbi against the dollar. And, while the impact of today’s news that a second vaccine has also proven effective in stage three trials has been much more limited, the renminbi fell back a touch in offshore trading on that announcement too.