(13 February 2026 – China) The Chinese Renminbi (RMB) currency extended gains this month as investors increasingly cycled out of US dollar assets in response to concerns over the Federal Reserve’s independence and US debt sustainability.
The People’s Bank of China (PBoC) set the RMB daily fixing rate at 6.944 against the US dollar, marking its strongest level almost three years.
The greenback has been unable to withstand sustained selling pressure in recent months as persistent concerns are raised over President Trump’s policy volatility and interventions in the Federal Reserve, as well as the United States’ long-term fiscal sustainability.
“Is US dollar debasement a fear or a fact? In our latest CBA FX Strategy note, we examine whether concerns about USD debasement are justified. Right now, there’s no evidence of debasement – inflation remains contained and financial markets aren’t signalling meaningful concern” commented CBA FX Strategy and International Economist, Kristina Clifton.
“But the risk profile is changing. Political pressure on the Federal Reserve’s independence has intensified, including this week’s subpoena and potential criminal charges related to renovations at the Fed’s headquarters. These developments have brought renewed attention to the importance of policy credibility.”
“While markets remain calm for now, we expect a modest rise in US term premium through 2026 as questions around the FOMC’s independence and credibility build.”