The Chinese renminbi (CNY) has gained around 0.3% against the US Dollar (USD) since Jerome Powell's speech, Commerzbank's FX analyst Volkmar Baur notes.

Way is clear for a slightly lower USD/CNY exchange rate

"At first glance, this does not sound like much. However, for the CNY, it is quite a significant movement. This is particularly true because the movement of the market rate was accompanied by a corresponding increase in the central bank's fixing rate. The rise of the CNY was thus 'approved' by the authorities, so to speak."

"In recent weeks, we have seen the fixing rate against the US dollar steadily strengthen. However, the market exchange rate did not really want to follow suit. As a result, the difference between the fixing and market rates grew larger and larger. It almost seemed as if the Chinese central bank wanted to signal to the market that it was willing to allow a stronger USD/CNY exchange rate. However, the market did not quite trust the whole thing. With the dovish speech by the chairman of the US Federal Reserve on Friday, this seems to be changing a bit this morning."

"The fixing was adjusted more significantly than it has been since January, and the market exchange rate for the CNY also improved. It therefore appears that the way is clear for a slightly lower USD/CNY exchange rate in the coming weeks and thus for a slightly stronger CNY against the USD. However, if this goes hand in hand with a weak US dollar, it is of course still possible that the CNY will continue to depreciate against the euro."