## Renminbi Outlook Forecast: Is There Still Room for Growth in 2026? The Latest Exchange Rate Analysis Is Here

2025 has been dubbed the "reversal" year for the Renminbi. Looking back over the year, USD to RMB fluctuated bidirectionally within the range of **7.04 to 7.3**, with an overall appreciation of about 3%, breaking the three-year consecutive depreciation trend from 2022 to 2024. In mid-December, the RMB strengthened further, breaking the 7.05 barrier. As of the time of writing, it has touched **7.0404**, hitting a 14-month high, which is a significant breakthrough.

But the question remains—Is now a good time to buy RMB? How much more appreciation potential is there in the future?

## Three Major Supports Drive RMB Appreciation Forecast Into an Upward Trend

The market generally believes that the RMB is at a cyclical turning point, with the **depreciation cycle already over and a new medium- to long-term appreciation trajectory underway**. Looking ahead to the end of 2025 and into 2026, three key supporting factors will continue to push the RMB outlook positively:

**First, China’s export resilience is strong.** Despite global economic uncertainties, China’s manufacturing sector continues to demonstrate robust competitiveness, with export growth consistently exceeding expectations. This provides a stable demand foundation for the RMB.

**Second, foreign investment is reallocating into RMB assets.** As China-US trade dialogue eases, international investors’ confidence gradually recovers, with clear signs of capital inflows, boosting demand for RMB assets.

**Third, the structural weakening of the US dollar index.** The Federal Reserve’s rate-cut cycle has begun, with the dollar index falling from 109 at the start of the year to 97.869 in December, reflecting dollar weakness, which naturally favors RMB appreciation forecasts.

## Optimistic Expectations from International Investment Banks

Deutsche Bank’s analysis indicates that the recent strength of the RMB against the USD signals the start of a **long-term appreciation cycle**. The bank forecasts the RMB will rise to 7.0 by the end of 2025 and further appreciate to **6.7** by the end of 2026.

Even more aggressive is Goldman Sachs’ view. The global FX strategy head stated in a report that the current real effective exchange rate of RMB is undervalued by 12% compared to its 10-year average, with an even higher undervaluation of **15%** against the USD. Based on this, Goldman Sachs expects the RMB to appreciate to 7.0 against the USD within the next 12 months, emphasizing that the "breaking 7" threshold may arrive sooner than the market expects.

Goldman Sachs’ logic is clear: strong Chinese exports will support the RMB, and the Chinese government prefers to use other policy tools to boost the economy rather than pursue currency depreciation strategies.

## Core Variables in RMB Outlook Forecast: Three Key Focus Areas

The factors influencing RMB outlook forecasts are complex, but can be summarized into three core variables:

**USD Index Trends:** The strength or weakness of the dollar directly determines RMB appreciation or depreciation. Currently, the USD index is in the 97.8-98.5 range. If the Federal Reserve continues to cut rates, the dollar will face further weakening pressure, which is positive for RMB appreciation. Conversely, if inflation data exceeds expectations, the dollar may rebound, limiting RMB gains.

**US-China Trade Relations Evolution:** Recent US-China trade negotiations have made progress, with the US lowering fentanyl-related tariffs to 10% and suspending additional tariffs until November 2026. However, whether this truce can be sustained long-term remains uncertain. If tensions escalate, markets will face renewed pressure, and the RMB outlook may turn weaker.

**China’s Policy Intensity:** The People’s Bank of China tends to maintain an accommodative policy to support economic recovery. If such easing is combined with stronger fiscal stimulus to stabilize the economy, it will support the RMB in the long term. Monitoring the signals from the RMB’s midpoint rate adjustments is also crucial.

## Offshore RMB (CNH) Performance Is More Sensitive

Offshore RMB (CNH) behaves somewhat differently from onshore RMB (CNY). Since CNH is traded more freely in international markets with capital flows less restricted, **its volatility tends to be greater**, and it reacts more quickly to global market sentiment.

In 2025, CNH also experienced oscillations upward. Early in the year, impacted by US tariff policies, CNH briefly broke below 7.36. But as US-China dialogue improved and growth stabilization policies took effect, CNH strengthened significantly, breaking through 7.05 on December 15, rebounding over 4% from the early-year high, and hitting a 13-month high.

## Is Now a Good Time to Buy RMB? Investment Advice

Overall, **short-term expectations suggest RMB will remain relatively strong**, but rapid and large appreciation is unlikely. It is less probable to see a quick drop below 7.0 before the end of 2025; instead, the currency is more likely to fluctuate within a range.

For trading RMB-related currency pairs, **timing is key**. Focus on:

1. **USD Index Trends** — Closely monitor whether the dollar continues to weaken, as this is a necessary condition for RMB appreciation.
2. **RMB Midpoint Rate Signals** — Observe the People’s Bank of China’s policy orientation; adjustments to the midpoint often signal future exchange rate directions.
3. **China’s Growth Stabilization Policies** — Assess the actual effects of fiscal and monetary policies, which will influence the RMB’s medium- to long-term trend.

## How to Judge RMB Outlook Forecast? Four Core Dimensions

It’s better to teach people how to fish than to give them fish. Mastering the following four dimensions will help you better understand RMB outlook forecasts regardless of market changes:

**1. Central Bank Monetary Policy Tightness:** Rate cuts and reserve requirement reductions usually lead to RMB depreciation, while rate hikes and reserve increases tend to strengthen RMB. In 2014, China’s central bank cut rates six times consecutively, causing the RMB to fall from 6 to 7.4, demonstrating policy power.

**2. China’s Economic Fundamentals:** Stable economic growth attracts continuous foreign capital inflows, increasing demand for RMB. Focus on indicators like GDP, PMI, CPI, and fixed asset investment, which reflect economic vitality and market confidence.

**3. Relative USD Trends:** The Federal Reserve and European Central Bank policies are often key drivers of USD movement. For example, in 2017, the ECB signaled tightening, and the USD index fell 15% over the year, benefiting the RMB.

**4. Official Exchange Rate Orientation:** Unlike freely floating currencies, the RMB’s midpoint quotation mechanism incorporates a "counter-cyclical factor," reflecting official guidance on the exchange rate. While short-term influences are evident, the medium- to long-term trend depends on market direction.

## Conclusion

The RMB outlook is entering a critical phase. As China enters a period of monetary easing—similar cycles have historically lasted up to ten years—short- and medium-term fluctuations will be influenced by USD trends and other events. By focusing on the four key factors outlined above, investors can significantly improve their profit potential. The forex market is primarily macro-driven, with transparent data from various countries, large trading volumes, and support for two-way trading, making it a relatively fair and attractive investment opportunity.