A recent rally in China’s yuan has been primarily fuelled by stronger guidance from its central bank rather than by market forces, analysts said, pointing to a mostly steady US dollar index.

However, they noted, this period of strengthening is likely to remain measured, as Beijing prefers to avoid harming the competitiveness of its exporters amid trade tensions with the United States.

Over just five trading days last week, the People’s Bank of China pushed the yuan’s reference rate against the US dollar from 7.1321 to 7.1030 – a pace that He Wei, an economist with Beijing-based research firm Gavekal Dragonomics, said matched the total change observed over the previous two months.

In contrast, the US dollar index showed no significant weakening – mostly fluctuating between 97.8 and 98.6 – even after Federal Reserve Chair Jerome Powell opened the door to a September interest rate cut during a speech late last month.

In a note on Wednesday, He of Gavekal said China’s central bank had “decided to push up the renminbi, even though currency markets were not moving in that direction.”

The move could have been made proactively to prepare for a potential weakening of the US dollar, He said, as the likelihood of a rate cut increases and concerns over the Federal Reserve’s independence mount under US President Donald Trump.