And now, Trump finally has reason to be angry with China for intervening in its currency to manipulate it lower, not higher.

After the biggest weekly surge in the Yuan on record, the first sign that Beijing had had enough of the relentless surge in the currency was unveiled overnight, when according to a Reuters report quoting “policy insiders” China had “begun to worry about a rallying yuan as exporters come under strain” a sign the currency’s gains might lose steam after it hit a two-year against the dollar just weeks before Beijing is set to host a crucial Communist Party gathering in the autumn.

For those who have not been following our daily morning update on the Yuan, here is how sharp the move has been in recent weeks, and how painful to countless Yuan shorts who have been left with massive margin losses.

In a rapid turn in fortunes after last year’s slide, the yuan’s sharp rebound since May has presented a fresh headache for authorities as Chinese exporters are suddenly facing the same pressure as their European peers (where the 1.20 line in the EUR/USD has proven to be a “red line” for the ECB, beyond which exporter profits are expected to tumble). However, intervening to cap the Yuan could expose China to accusations of currency manipulation by U.S President Donald Trump, effectively tying the PBOC’s hands.

“Appreciation is better than deprecation, but the pace of appreciation cannot be too fast, otherwise it will be unfavourable for domestic firms,” a policy insider told Reuters.

The rally has been spurred by the dollar’s broad decline, optimism about the economy, a crackdown on capital outflows, and more recently the central bank’s tighter control of the mid-point, from which the yuan can rise or fall 2 percent.0

The yuan has gained nearly 7.8 percent against the dollar so far this year, including just over 6 percent since late May, more than making up its losses of 6.5 percent in 2016 – the biggest annual drop since 1994.

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