Recent discussions about the RMB exchange rate have really caught fire. A lot of people are asking whether it’s worthwhile to exchange RMB for USD right now, so I’ve put together some of my latest observations and shared them with everyone.

To be honest, this round of RMB performance has definitely been eye-catching. Ever since it broke above the 7.0 mark toward the end of last year, it has accelerated its upward trend since the beginning of this year, even reaching 6.81 at one point—its highest level in nearly three years. In just a few trading days, it climbed by almost 600 points, which is certainly not common over the past few years.

So, is it worthwhile to exchange RMB for USD now? My view is that in the short term it’s unlikely to keep surging higher in a one-way move, but the long-term logic is still there. The central bank recently cut the foreign exchange risk reserve ratio. This action sends a signal that the authorities do not want the exchange rate to appreciate excessively, which may slow the pace of the short-term rise. However, for people who want to hold long term or hedge against USD risk, positioning now still has some value.

There are three main factors supporting this appreciation. First, China’s export performance is truly strong. Last year, the trade surplus hit a record high of 1.2 trillion USD, and this momentum continues into this year. Second, the US dollar index overall is relatively weak, hovering around 98 from its low at the start of the year to now. Third, foreign investors are reallocating their RMB assets, which has driven net capital inflows.

From the perspective of economic fundamentals, in the first quarter this year, GDP grew 5.0% year-on-year, reversing the lows at the end of last year and giving the market a lot of confidence. Combined with the fact that the People’s Bank of China maintains a prudent policy orientation, and that the overall economy is undergoing structural optimization, these are the core drivers supporting the RMB’s strength.

Of course, risks should also be considered. External factors such as developments in the Iran-U.S. situation, progress in US-China trade negotiations, and the Federal Reserve’s future policy could all bring volatility. If geopolitical tensions escalate or inflation picks back up, the USD could see a phase of rebound, and at that time the attractiveness of exchanging RMB for USD would decline.

Several international investment banks still have a positive view on the RMB’s outlook. Goldman Sachs maintains a target price of 6.70 for this year, believing there is still about 22% room for appreciation. HSBC expects it may be around 6.75 by the end of the year. These forecasts largely reflect market consensus: as long as the USD’s credibility is not restored and China’s economic fundamentals continue to release positive signals, the RMB’s appreciation momentum has a chance to continue.

For investment and execution strategies, my suggestion is to adopt a phased positioning approach. The timing to exchange RMB for USD is fairly good right now, but don’t blindly chase higher prices. My estimate is that in the short term, the exchange rate will likely consolidate and fluctuate between 6.83 and 6.92, and there may even be a slight pullback. Therefore, entering in batches and setting clear take-profit and stop-loss points is the more sensible approach. At the same time, closely watch the daily midpoint rates released by the central bank and the subsequent China trade data.

Looking back over the past five years, the RMB saw significant appreciation from 2020 to 2022, then after the end of the pandemic it faced depreciation pressure between 2023 and 2025, before the situation turned around only in the second half of last year. If this round of appreciation cycle follows historical patterns, it could last for a fairly long time.

In the end, the factors involved in the foreign exchange market are mainly macro-level. The data published by different countries is public and transparent. For investors who want to know whether exchanging RMB for USD is worthwhile, the key is to grasp a few core factors that affect the exchange rate—China’s monetary policy, the performance of economic data, the trend of the USD, and the official policy orientation toward the exchange rate. Once you understand these, you can greatly improve the accuracy of your judgment.