Recently, while reviewing the recent trend of the Renminbi, I found some quite interesting logic and want to share it with everyone.

Speaking of the forecast for the RMB against the US dollar exchange rate trend, in fact, many institutions had already made judgments last year (2025). At that time, the RMB experienced a process from depreciation to recovery, and by the end of the year, there were clear signs of appreciation, once touching below 7.08. Looking back now, this wave of market movement basically verified the prediction logic of institutions like Goldman Sachs in mid-2024—there is indeed room for the RMB to be undervalued.

Why is that? The core reasons are a few factors. First is the weakening of the US dollar index. Since last year, the Fed’s rate cut expectations have been heating up, and this trend has become even more obvious this year. A weaker dollar naturally leaves room for the RMB to appreciate. Second is the easing of China-US trade relations. Negotiations made progress in the second half of last year, which supported the RMB. Additionally, China’s export resilience has been persistent, providing substantial support for the RMB.

Regarding exchange rate trend forecasts, the judgments made by international investment banks last year now seem quite accurate. Deutsche Bank predicted the RMB against the dollar would rise to around 6.7, and Morgan Stanley forecasted around 7.05. The current actual trend is fluctuating within this range. What does this indicate? It shows that the RMB’s appreciation cycle has indeed started, and the depreciation cycle that began in 2022 has basically come to an end.

But to be clear, this appreciation isn’t constant. Factors like the US dollar index, progress in China-US trade negotiations, and the Fed’s policy pace will continue to influence short-term exchange rate fluctuations. Especially if the Fed’s rate cut pace slows down due to inflation data not cooperating, it could support the dollar and, in turn, suppress the RMB’s appreciation potential.

From a technical perspective, the central parity pricing mechanism of the RMB against the dollar includes a counter-cyclical factor, reflecting the central bank’s active management of the exchange rate. Last year, the central bank was guiding market expectations and easing excessive depreciation pressure. This policy orientation had a noticeable short-term impact, but the medium to long-term trend still depends on the overall direction of the currency market.

For investors, the current environment actually offers some opportunities. The RMB-related currency pairs do have trading space, but the key is to grasp timing and risk. If you want to participate, you can do so through bank foreign exchange accounts or find reputable forex trading platforms. Many platforms now support two-way trading and leverage tools, which can be helpful for investors seeking flexible allocation. Of course, leverage is a double-edged sword, and it should be set according to your risk tolerance.

Finally, the key to judging the RMB exchange rate trend forecast still lies in paying attention to several fundamental factors. The central bank’s monetary policy direction, domestic economic data (GDP, PMI, CPI, etc.), and the Fed’s policy moves. These are all transparent and publicly available data. Regularly tracking them makes it not difficult to grasp the overall trend. After all, the forex market has high liquidity, and two-way trading is relatively fair, making it a good choice for ordinary investors.