????Surprise, surprise, surprise: The Chinese are still holding the value of their currency down against the dollar.

????It has been almost a month since China said it would let the renminbi trade more freely, in an apparent bid to reduce trade tensions with the United States and Europe. Legislators have been saying a stronger renminbi could trim trade imbalances and stem the loss of manufacturing jobs to China.

????But four weeks later, the trade-weighted value of the renminbi has actually fallen, as the Chinese currency's appreciation against the dollar has failed to keep pace with the euro's recent recovery.

????Economists have been saying China would move very deliberately to introduce greater flexibility into currency trading. Even so, the renminbi's slip is noteworthy.

????"The overall impression is that politics continues to trump economics," Capital Economics economist Mark Williams wrote in a note to clients Wednesday.

????After an early rise, the value of the renminbi has flattened out against the dollar -- even as the dollar has weakened against the euro.

????This suggests that despite its pledge to let the renminbi track a basket of global currencies issued by its trading partners, China continues to peg the value of its currency to the dollar.

????A weaker dollar against currencies such as the euro should increase the value of the renminbi. The European Union and the United States both did around $370 billion worth of trade with China last year, so a trade-weighted basket of currencies would include roughly equal amounts of dollars and euros.

????But while the euro has gained 5% against the dollar over the past month, the renminbi has gained just 0.8% against the greenback. This suggests to Williams that the Chinese continue to peg their currency against the dollar, official claims notwithstanding.

????This observation will do nothing to mollify trade hawks in Congress who have been pushing the administration to sanction China for manipulating the value of its currency. Sen. Charles Grassley, R-Iowa, last month called for the White House to bring a trade case against China in the World Trade Organization over its handling of its currency.

????"I have serious concerns about the direction that China's government is taking in advancing mercantilist economic and trade policies," Grassley said June 23.

????To be sure, Chinese officials have plenty of time to adjust their policies if and when they so desire. But for now, having surprised the world with last month's announcement just before the G-20 summit in Toronto, "policymakers in Beijing appear to see no pressing reason to continue with rapid appreciation," Williams said.