Commerzbank has questioned an internal view on CNY undervaluation and export performance, focusing instead on China’s exchange-rate management and gold purchases as factors consistent with a weaker currency stance. The argument centres on how China’s pricing advantage may have fed into trade outcomes, while acknowledging that multiple drivers can influence export results and that China has, in some categories, created new markets.
From 2019 to the end of 2025, China’s real exports rose 47% as global trade grew 15%, and over the same span China’s trade surplus increased from about USD 400 billion to USD 1,180 billion. In 2025, China’s manufactured-goods surplus totalled 1.75% of global gross domestic product. Over 2019–2025 the real exchange rate of the CNY fell about 10% on a trade-weighted basis and 22% against the euro, alongside reference to a roughly 20% real exchange-rate advantage in assessing potential effects on trade flows.
Ongoing Pressure on the Yuan Amid Global Trade Tensions
We believe derivative traders must prepare for continued pressure on the Chinese Yuan in the coming weeks. China’s massive trade surplus, which ballooned to $1.18 trillion by the end of last year, continues to be supported by a highly competitive exchange rate. As global trade tensions rise, the central bank is highly likely to keep the currency weak to protect its massive market share.
Recent data from August 2026 shows the USD/CNY exchange rate testing the 7.25 level, while China’s exports grew by a resilient 7% year-on-year last month. This resilience is crucial as Western markets implement new tariffs, such as the European Union’s duties on Chinese electric vehicles, forcing Beijing to maintain its currency advantage. We recommend buying short-term USD/CNH call options to profit from sudden upward moves in the exchange rate.
Trading Strategies and Historical Context
Looking back at the trade conflicts of 2018 and 2019, the yuan depreciated sharply to offset foreign tariffs, a pattern we expect to see repeated. Since the currency has already weakened significantly against the euro over the last several years, we see excellent value in put options on the EUR/CNH pair. Traders can use these options to hedge against a sharper-than-expected devaluation of the yuan in the coming weeks.
