Recently, the performance of the Chinese yuan has indeed been worth paying attention to. I noticed that this wave of appreciation started to become particularly evident since the end of last year, and accelerated around the Spring Festival this year, even reaching levels of 6.81 to 6.82, hitting a nearly three-year high. Currently, both offshore and onshore exchange rates are fluctuating between 6.82 and 6.95, with a cumulative increase of over 1,400 basis points.

Behind the forecast of the USD to RMB exchange rate trend this time are actually several core driving factors. First, China's export resilience exceeded expectations, with the full-year trade surplus reaching $1.2 trillion in 2025, a 20% increase compared to the previous year. How big is this figure? It’s roughly equivalent to the GDP of one of the top 20 economies globally. The momentum continues into 2026, with Q1 GDP growing year-on-year by 5.0%, surpassing market expectations, indicating that the economy is undergoing structural optimization.

Second, the overall weakness of the US dollar index has also provided room for the RMB to appreciate. Interestingly, however, the RMB’s appreciation has significantly exceeded the dollar’s decline. Especially after the Middle East situation changed in mid-March, the dollar appreciated against most currencies, yet the RMB strengthened against the trend. This suggests that what truly supports the RMB is still the recovery of China’s economic fundamentals and the trend of foreign capital reallocating into RMB assets.

However, the central bank has recently taken measures to "cool down" the situation. On February 27, it announced a reduction of the foreign exchange forward contract risk reserve ratio from 20% to 0%, aiming to lower companies’ foreign exchange purchase costs and encourage exporters to buy dollars, thereby slowing the RMB’s rapid appreciation. This signals that the authorities do not want the exchange rate to appreciate excessively on one side.

Looking ahead at the USD to RMB trend forecast, many international investment banks remain optimistic. Goldman Sachs maintains a target of 6.70 for the next 12 months, believing the RMB is still about 22% undervalued. HSBC sets its year-end target at 6.75. However, in the short term, due to central bank policy adjustments and seasonal factors (the second quarter is usually a peak period for corporate FX purchases), the exchange rate is unlikely to surge unilaterally, and is expected to fluctuate between 6.83 and 6.92.

In my opinion, currently, there is indeed some thematic support for positioning in RMB. For investors with long-term holding needs or those looking to hedge against USD risk, a phased approach is a more prudent strategy. But it’s important to set stop-profit and stop-loss levels, and closely monitor the daily midpoint rates published by the central bank as well as subsequent trade data releases. The logic supporting this RMB appreciation wave still exists, but in the short term, it’s unlikely to surge straight up; more likely, it will be in a range-bound pattern.