Yuan gains momentum as global banks revise forecasts higher

 Some global investment banks have revised their forecasts for the Chinese yuan higher, citing the country’s export competitiveness and stable trade relations with the United States.

The Chinese currency has steadily strengthened this year, rising nearly 3% against the US dollar to 6.8040 per dollar on Monday.

The yuan has also gained about 2.6% against its major trading partners.

HSBC sees structural support for the yuan

HSBC said it expects modest further appreciation in the yuan and raised its year-end forecast to 6.65 per dollar from 6.75 previously.

According to HSBC analysts, several structural themes continue to support the Chinese currency.

These include the competitiveness of Chinese exports, internationalisation of the renminbi, diversification away from the US dollar, and China’s economic rebalancing efforts.

“RMB internationalisation, long-term diversification from USD, and economic rebalancing are key domestic structural themes supporting the RMB. Externally, US-China economic relations have become stable and more constructive since May 2025,” HSBC analysts said in a note.

The bank pointed to improving economic ties between the world’s two largest economies as an additional factor supporting the yuan’s outlook.

Deutsche Bank expects import growth to aid currency

Deutsche Bank also projected further gains for the yuan, driven by strong import growth in China.

Deutsche Bank economists Yi Xiong and Deyun Ou said stronger imports of upstream products could lead to an increase in export orders or a recovery in domestic demand.

“A surge in China's imports of upstream products will likely be followed by a further pickup in export orders, or a recovery of domestic demand, or both,” the economists said in a note.

The bank revised its baseline forecast for the yuan to 6.55 per dollar by the end of 2026, compared with an earlier estimate of 6.7 per dollar.

The revised outlook reflects expectations that improving trade activity and domestic demand conditions could strengthen the Chinese currency further over the medium term.

Goldman Sachs sees longer-lasting yuan strength

Goldman Sachs also maintained a positive outlook on the yuan, saying the currency could experience further and longer-lasting strength.

Goldman attributed its view to China’s large external surplus and the continued competitiveness of the country’s exports.

The bank acknowledged challenges stemming from the Iran war and rising energy costs, but said the medium-term outlook remained constructive.

According to Goldman, anticipated global investment in energy security and renewable energy projects could support Chinese exports in the coming years.

The US investment bank now expects the yuan to trade at 6.80, 6.70, and 6.50 per dollar over the next three, six, and 12 months, respectively.

Those projections compare with Goldman’s earlier forecasts of 6.85, 6.80, and 6.70 per dollar.

The revised forecasts from major investment banks reflect growing confidence in the resilience of China’s trade sector and the yuan’s broader outlook despite geopolitical and economic uncertainties. 

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