I have been paying close attention to the trends in the USD to CNY exchange rate recently and have indeed noticed some interesting changes. From the beginning of this year until now, the performance of the Chinese yuan against the US dollar has been noticeably different compared to last year, reflecting the market's re-pricing of future prospects.

Looking back at past situations can reveal some clues. Starting from the depreciation cycle in 2022, the yuan experienced three consecutive years of decline, with the USD to CNY rate once exceeding 7.4. But after the second half of 2025, the trend began to shift. By the end of November, the yuan appreciated to below 7.08, even touching 7.0765 at one point, which is the highest in nearly a year. This turning point is worth noting because it may signal the beginning of a longer-term trend.

Major international banks generally have a bullish outlook on the USD to CNY exchange rate. Deutsche Bank believes the yuan may be entering a long-term appreciation cycle, estimating it could reach 7.0 by the end of 2025 and further appreciate to 6.7 by the end of 2026. Morgan Stanley's view is similar; they expect the dollar index to fall back to around 89 by 2026, with the yuan possibly rising to about 7.05. Goldman Sachs offers an even more interesting analysis, pointing out that the yuan is actually undervalued by about 12%, with an undervaluation against the dollar reaching 15%. Based on this logic, they project the yuan will appreciate to 7.0 over the next 12 months.

Several factors support this judgment. First, China's export resilience remains strong, continuing to support the yuan. Second, the dollar index itself is weakening; the Fed's cycle of rate cuts suggests the dollar may continue to face pressure in the near future. Third, foreign investment interest in Chinese assets is rebounding. The combination of these three factors forms a basis for expecting the yuan to appreciate.

However, making steady profits now still requires good timing. In the short term, the yuan is expected to remain relatively strong, but the probability of a rapid appreciation below 7.0 is not high. The key variables to watch are: the movement of the dollar index, signals from the central parity rate adjustments, and the pace of China's stabilizing growth policies.

From an investment perspective, the core factors to monitor when judging the USD to CNY exchange rate are a few fundamentals. First, the monetary policy stance of the central bank—whether it is easing or tightening—directly affects supply and demand. Second, economic data such as GDP, PMI, and CPI reflect economic activity and influence foreign capital flows. Third, the Federal Reserve's policy moves directly determine the strength of the dollar index. Lastly, policy guidance should not be overlooked; although the marketization of the yuan has increased, the official exchange rate setting mechanism still plays a guiding role, especially in the setting of the central parity rate.

For those interested in participating in this market, there are now more options than before. You can use bank foreign exchange accounts, find forex brokers, or trade through futures exchanges. Many platforms support two-way trading and leverage, meaning profits are not limited to currency appreciation; if your directional judgment is correct, you can profit from declines as well. Of course, leverage is a double-edged sword; while it amplifies gains, it also increases risks. You must set your leverage according to your risk tolerance.

Overall, this yuan appreciation cycle may have just begun, but its future trajectory depends on the evolution of US-China relations, dollar movements, and domestic policies. The forex market is transparent, with high trading volume and the ability to operate in both directions, making it relatively fair for ordinary investors. As long as you grasp the main factors influencing the USD to CNY exchange rate, your chances of profit can be significantly improved.