China’s currency has gained further momentum — wiping out the heavy losses it took over the summer — amid cooling tensions between Beijing and Washington.

The renminbi rallied as much as 0.5 per cent against the US dollar, crossing the Rmb6.9 mark for the first time since August and bringing its rise for 2020 to nearly 1 per cent. Its climb in the early days of this year highlights the upbeat sentiment among global investors and cautious optimism of an improvement in relations between the world’s two biggest economies.

The currency in August faced its worst sell-off in a quarter century and eventually slumped to nearly 7.2 to the US dollar in a fall that ricocheted across world markets. Traders and investors closely watch the currency as a broader market bellwether to which movements in many other assets are often closely tied, according to analysts.