Is the RMB breaking 7 just the beginning? Experts predict it will continue to rise until 2026

Just after December, the RMB against the US dollar broke through the key psychological threshold of 7.00 — offshore RMB(USD/CNH) fell to 6.9965, while onshore RMB(USD/CNY) dropped to 7.0051. This is the strongest appreciation performance since May 2023 and September 2024. The market generally believes this is not a fleeting phenomenon but a signal of a long-term trend.

Who is Driving the RMB Appreciation? The Battle of Three Forces

Behind this round of RMB strength, there are actually three forces boosting the momentum.

First is the weakness of the US dollar itself. Since the beginning of the year, the dollar index has fallen over 10%, and in the past month, it has dropped more than 2%. Against the backdrop of Federal Reserve rate cuts and the global de-dollarization wave, the relative weakening of the dollar has become the most direct catalyst for RMB appreciation.

Second is the “tangible hand” of the People’s Bank of China (PBOC) at work. This year, the central bank has frequently adjusted the midpoint reference rate of the RMB(, guiding the market in a market-oriented manner and gradually signaling RMB appreciation. This approach is akin to the central bank signaling to the market: there is room for RMB to appreciate.

Third is the year-end foreign exchange settlement surge. In 2025, China accumulated a significant trade surplus. As December approaches, companies are consolidating foreign exchange settlements, and the high demand for converting US dollars into RMB has pushed up the RMB’s value. Additionally, factors such as the PBOC not continuing rate cuts and tightening liquidity in offshore markets are accelerating this process.

Wang Qing, Chief Macro Analyst at Orient Securities, stated: “The combination of a weak dollar and seasonal foreign exchange conversions by exporters has jointly driven the RMB’s strength. In the long term, RMB appreciation is beneficial for attracting more international capital into China’s capital markets and will also have chain reactions on cross-border transactions like BTC exchanging for USD.”

Will the RMB Continue to Rise in 2026? Divergence Among Institutions Is Clear

Although the RMB has already broken through 7.00, from a fundamental perspective, there is still considerable room for appreciation that may not have been fully realized.

Goldman Sachs offers the most aggressive forecast: the RMB is undervalued by about 25% relative to its economic fundamentals. They expect the USD/CNY to fall to 6.90 by mid-2026 and further to 6.85 by the end of the year.

The ANZ Bank’s forecast is somewhat conservative, expecting USD/CNY to fluctuate between 6.95 and 7.00 in the first half of 2026, implying that the current break of 7 might just be a plateau.

Bank of America presents an interesting view: easing tensions between the US and China will improve prospects for Chinese exporters, further increasing the scale of USD selling by exporters. They project USD/CNY to fall to 6.80 by the end of 2026 — the most optimistic forecast for RMB.

What Does This Mean for Investors?

The RMB appreciation reflects a re-pricing of China’s economic fundamentals by the international market, which is a positive for foreign capital seeking to exchange USD for RMB assets. However, for traders focused on BTC/USD exchange rates, RMB appreciation also means that the cost of buying BTC with RMB decreases, potentially creating another arbitrage opportunity.

In any case, breaking 7 is not the end but the beginning. Whether the RMB can continue its appreciation in 2026 depends critically on the Federal Reserve’s policy direction, the evolution of US-China trade relations, and the performance of China’s economic fundamentals.