Recently, I’ve been paying attention to the recent trend of the renminbi, and it’s quite interesting. Since breaking above 7.0 at the end of last year, it has surged even higher at the start of this year, with a rapid increase of nearly 600 points in just a few trading days after the Spring Festival. Currently, it’s fluctuating between approximately 6.82 and 6.95. Many people ask me, can you buy the renminbi now? This question isn’t actually that simple.

There are three main drivers behind this round of renminbi appreciation: First, China’s export performance is indeed strong, with the full-year trade surplus reaching a record high of $1.2 trillion, a 20% increase compared to the previous year. This figure is already comparable to the GDP of one of the top 20 economies in the world. Second, the US dollar index is generally weak; although the Middle East tensions once boosted the dollar, it has now returned to a soft state, oscillating narrowly between 98.0 and 98.5. The third factor is the continued repurchase of renminbi assets by foreign investors, reflecting a clear rebound in market confidence in China’s economy.

However, there is a detail worth noting: the People’s Bank of China (PBOC) recently took steps to “cool down” the market by lowering the foreign exchange risk reserve ratio, signaling that the authorities do not want the exchange rate to appreciate excessively on one side. In other words, can you buy the renminbi now? The answer is conditional. In the short term, the appreciation pace may slow down, and the exchange rate is more likely to fluctuate within a range rather than continue rising unilaterally.

From a fundamental perspective, support still exists. China’s GDP in the first quarter grew 5.0% year-on-year, exceeding market expectations, indicating ongoing structural optimization of the economy. Goldman Sachs maintains a target price of 6.70 for the renminbi over the next 12 months, believing there is about a 22% undervaluation; HSBC sets its year-end target at 6.75. These all suggest that international institutions remain optimistic about the long-term outlook of the renminbi.

So, if you ask whether you can buy the renminbi now, my view is this: in the short term, it’s not advisable to chase the high blindly, but if you have a long-term holding need or want to hedge against the dollar risk, it’s indeed worth gradually accumulating. The key is to set proper take-profit and stop-loss levels, and closely monitor the daily midpoint rates set by the central bank and subsequent Chinese trade data. The second quarter is usually a period when corporate forex demand is higher, which can also exert some pressure on the exchange rate.

From an investment perspective, the core factors to watch for predicting the renminbi’s trend are: the monetary policy stance of the PBOC, economic data performance, the US dollar trend, and the official attitude toward the exchange rate. As long as the US dollar’s credibility remains unrestored and China’s economic fundamentals continue to send positive signals, the upward momentum of the renminbi could persist. However, short-term volatility is unavoidable, so a phased accumulation strategy would be more prudent.