Merz at G7: Chinese Yuan Undervalued by Up to 30%

Key Facts

In a move reflecting escalating trade tensions between Western powers and Beijing, Friedrich Merz raised the issue of currency manipulation during the G7 summit. According to reports, Merz stated that the Chinese Yuan (CNY) is undervalued by as much as 30% compared to its fair value. These remarks were made within the context of broader G7 discussions regarding global trade imbalances and China's monetary practices.

This political pressure coincides with mixed economic data from major economies, as market data showed the U.S. Annual CPI reached 4.2% on June 10, 2026, exceeding the previous reading of 3.8% (per market data). Traders are closely monitoring Asian currency movements following research reports suggesting that the gap between the official exchange rate and the Yuan's purchasing power remains a core point of contention in international trade relations, potentially paving the way for new tariffs.

Investors should watch key currency levels as the offshore Yuan remains sensitive to potential official responses from Beijing. Looking ahead at the economic calendar, market participants will focus on the Eurogroup meeting on June 11, 2026, and the UK Gross Domestic Product (GDP) release on June 12, 2026, to assess how these geopolitical tensions might impact global market risk appetite.