China’s currency strengthened to its highest level in five months as risk sentiment returned to global markets on Tuesday.

The onshore-traded renminbi rose 0.6 per cent to reach Rmb6.9340 per dollar late in the Chinese trading day, leaving it on track for its best daily performance in six months and its strongest levels since US-China trade tensions were roiling markets in early August.

Washington spent much of last year accusing Beijing of manipulating its currency lower to juice the economy as trade tensions escalated, and the renminbi sent a shudder through global markets when it weakened past Rmb7 per US dollar in August for the first time since 2008. The currency is permitted to trade 2 per cent on either side of a daily midpoint set by the People’s Bank of China.