I have been paying close attention to the impact of the US dollar exchange rate on the Chinese yuan recently and found that the trend over the past two years is indeed quite interesting.

Looking back, the depreciation cycle that started in 2022 seems to be really coming to an end. Last year, the yuan against the US dollar experienced quite a bit of volatility, with significant pressure in the first half of the year, once breaking below 7.4, but the situation clearly improved in the second half. Especially during that wave in November last year, the yuan rose to below 7.08, even touching 7.0765, hitting a nearly one-year high. Now, mid-2026, the overall trend of the US dollar exchange rate against the yuan has already shifted noticeably.

From a longer cycle perspective, the yuan was quite strong from 2020 to 2021, with the exchange rate stable between 6.35 and 6.58. That year, 2022, was quite tough—aggressive rate hikes by the Federal Reserve caused the US dollar index to soar, forcing the yuan to depreciate by about 8%. But over these past few years, the market has gradually recognized that this depreciation cycle may have already peaked.

Why do I say that? Mainly because several factors are at play. First, China’s export resilience is still there; second, foreign capital is starting to reallocate into yuan assets; third, the US dollar index has shifted from strength to a more structurally weak stance. The forecasts from international investment banks last year now seem to be generally correct—Deutsche Bank predicted the yuan would rise to 7.0, and Morgan Stanley said the dollar index would fall back to around 89. The actual trend now is indeed moving in that direction.

The main factors influencing the US dollar exchange rate against the yuan are still those: the Federal Reserve’s interest rate cut cycle, progress in US-China trade negotiations, the policy orientation of the People’s Bank of China, and the internationalization of the yuan. From a monetary policy perspective, the central bank’s rate cuts and reserve requirement reductions directly impact the supply and demand for the yuan. Economic data are also crucial—when GDP, PMI, CPI indicators perform well, foreign investment is more willing to flow in continuously, which is positive for the yuan.

For investing in currency pairs related to the yuan, there are indeed opportunities now. In the short term, the yuan is expected to remain relatively strong, although volatility will still exist, but the overall pattern is a range-bound upward trend. The key is to seize the right timing, paying attention to the movements of the US dollar index, signals from the central bank’s policies, and the progress of US-China economic negotiations.

If you want to invest in forex, traditional channels like commercial banks and futures exchanges are available, but many now also choose professional forex trading platforms. These platforms usually offer 24-hour trading, two-way operations, leverage tools, and other features. Of course, leverage is a double-edged sword—it can amplify gains but also risks, so it’s important to set it according to your risk tolerance.

Overall, the probability of the yuan shifting from a long-term depreciation cycle to an appreciation cycle is increasing, and the trend of the US dollar against the yuan has already shown signs of a turning point. As long as you keep an eye on macroeconomic changes, this market remains quite fair for investors—after all, the forex market is large, transparent, and the two-way trading provides more operational space.