2026 RMB Exchange Rate Trend Prediction: Can You Still Buy Now?

Renminbi is Quietly Turning Around

2025 is a pivotal year for the Renminbi. After experiencing a three-year depreciation cycle from 2022 to 2024, the Renminbi finally rebounds. In mid-December, the USD to RMB exchange rate surged past 7.05, reaching a high of 7.0404, the highest in nearly 14 months. What does this imply? Many are starting to ask: Can I buy Renminbi now?

Currently, the USD to RMB fluctuation range has stabilized between 7.04 and 7.3, with an appreciation of about 3% over the year. The offshore market is more volatile, fluctuating between 7.02 and 7.4, reflecting increasing sensitivity among international investors toward the Renminbi.

Why Did the Renminbi Suddenly Strengthen?

A review of the first half of 2025 reveals the clues. At that time, global tariff policies were highly uncertain, the US dollar index remained strong, and offshore RMB once broke below 7.40, reaching its weakest level since the 2015 “8.11” exchange rate reform. The market was generally pessimistic, believing the Renminbi would continue to weaken.

However, the situation changed in the second half. As China-US trade negotiations progressed and signs of easing emerged, the market gained some breathing room. Meanwhile, the US dollar index shifted from strength to weakness, falling from around 109 at the start of the year to about 98, a decline of nearly 10%. Against this backdrop, the Renminbi against the US dollar experienced moderate but sustained appreciation, and overall market sentiment gradually stabilized.

Three Major Factors Determining the USD to RMB Trend

1. Will the US Dollar Index Maintain Weakness?

In November, market expectations for a Fed rate cut increased, but the dollar index rebounded, repeatedly surpassing 100. In December, the Fed cut rates as expected, and the dollar index immediately declined, bottoming at 97.869, returning to the 97.8-98.5 range. Simply put, a moderate strengthening of the dollar usually puts pressure on the Renminbi, but whether this pressure persists depends on the resilience of the dollar index itself.

2. Can China-US Trade Relations Stabilize?

In early December, China and the US reached a new consensus in Kuala Lumpur. The US will reduce tariffs on fentanyl from 20% to 10%, and suspend the 24% additional tariffs until November 2026. Both countries also agreed to temporarily halt rare earth export controls and expand US agricultural purchases.

Sounds promising, but the risk lies in the fact that a similar agreement reached in Geneva in May collapsed quickly. The stability of China-US trade relations is the most critical external variable in judging the USD to RMB exchange rate. As long as the agreement holds, the RMB environment can remain stable; if friction increases, the market will face renewed pressure.

3. Contradictions in Central Bank Policies of Various Countries

The Federal Reserve’s policies are crucial for the dollar’s trend. If inflation remains above target, the Fed may slow down rate cuts, supporting a stronger dollar; conversely, economic slowdown could accelerate rate cuts. Meanwhile, the People’s Bank of China tends to maintain an accommodative policy to support economic recovery, which generally exerts downward pressure on the RMB. However, if loose policies are combined with strong fiscal stimulus that stabilizes China’s economy, it could boost the Renminbi in the long term.

The Renminbi and the US dollar index usually move inversely, which is the core logic for assessing the exchange rate.

How Do Investment Institutions View the 2026 Outlook?

Many international investment banks have recently turned optimistic.

Deutsche Bank believes that the recent strengthening of the Renminbi against the dollar signals the start of a long-term appreciation cycle. The bank forecasts the USD to RMB exchange rate will rise to 7.0 by the end of 2025, and further to 6.7 by the end of 2026.

Goldman Sachs is more aggressive. Global FX strategist Kamakshya Trivedi in a report raised the forecast for the next 12 months from 7.35 to 7.0. Goldman’s reasoning is that the current real effective exchange rate of the Renminbi is undervalued by 12% compared to its ten-year average, with an even larger undervaluation of 15% against the dollar. Based on this, Goldman expects the USD to RMB rate to rise above 7.0 in the next 12 months.

Additionally, Goldman states that China’s strong export performance will support the Renminbi, and expects the Chinese government to prefer using other policy tools to stimulate the economy rather than pursuing currency depreciation strategies.

Can You Buy Renminbi Now?

Honestly, trading in Renminbi-related currencies can be profitable, but timing is crucial.

In the short term, the Renminbi is expected to remain relatively strong, with a pattern of inverse correlation with the dollar and limited fluctuation range. The rapid appreciation into below 7.0 before the end of 2025 is less likely, so investors need patience.

Key variables to watch include: USD index trend, signals from the Renminbi midpoint rate adjustments, and the strength and pace of China’s stabilizing growth policies. Only when these three factors improve is it the best time to buy.

Five-Year Review: How Has the Renminbi Exchange Rate Changed?

Looking at the past five years helps understand why a rebound is happening now.

2020 was a turning point. The RMB started the year at 6.9-7.0, depreciated to 7.18 due to trade tensions and the pandemic, but as China quickly controlled COVID-19, led the recovery, and the Fed cut rates to near zero, the RMB rebounded strongly to 6.50 by year-end, appreciating about 6% for the year.

2021 continued its strength. China’s exports remained robust, the central bank maintained a steady policy, and the dollar index stayed low. USD to RMB fluctuated narrowly between 6.35 and 6.58, with an average around 6.45, showing relative strength.

2022 was a pain point. The Fed’s aggressive rate hikes pushed the dollar index higher, while China’s strict pandemic controls and real estate crisis dragged down the economy. The RMB rose from 6.35 to over 7.25 at its peak, depreciating about 8%, the largest annual decline in recent years.

2023 continued under pressure. USD to RMB fluctuated between 6.83 and 7.35, averaging around 7.0. China’s post-pandemic recovery was weaker than expected, with ongoing real estate debt issues and sluggish consumption.

2024 started to improve. The dollar weakened, easing pressure on the RMB. China’s fiscal stimulus and real estate support measures boosted confidence, with the exchange rate rising from 7.1 to around 7.3 mid-year.

How to Judge the Future Direction of the Renminbi?

Instead of obsessing over exchange rate figures, learn to analyze from four dimensions.

First, People’s Bank of China monetary policy. When the central bank cuts interest rates or reserve requirements, it signals increased supply, leading to a weaker RMB; tightening policies tend to strengthen the RMB. Historically, since 2014 when the PBOC adopted easing measures with six consecutive rate cuts, the USD to RMB rose from 6 to a high of 7.4, demonstrating the impact.

Second, China’s economic data. When China’s economy grows steadily or outperforms other emerging markets, it attracts foreign investment, increasing demand for the RMB, which appreciates. Conversely, economic slowdown leads to capital outflows. Key data include GDP, PMI, CPI, and fixed asset investment.

Third, the USD trend itself. The Federal Reserve and European Central Bank’s monetary policies are critical. For example, in 2017, the Eurozone’s strong recovery and ECB’s tightening signals caused the dollar index to fall 15%, and USD to RMB also declined significantly, showing high correlation.

Fourth, official guidance on the exchange rate. Since May 2017, the RMB midpoint rate has been adjusted to a “closing price + a basket of currencies + countercyclical factor,” strengthening official guidance. However, recent observations suggest this mainly influences short-term rates; the medium- and long-term trend still depends on the overall currency market direction.

Why Is Offshore RMB (CNH) More Volatile?

Offshore RMB (CNH), traded in international markets like Hong Kong and Singapore, has more freedom and fewer capital controls, reflecting global market sentiment, so its volatility is usually greater than onshore RMB (CNY). The PBOC guides the onshore rate through daily midpoint rates and forex interventions, but has less control over the offshore market.

In 2025, despite multiple fluctuations, offshore RMB against the dollar generally trended upward. Early in the year, impacted by US tariffs and the dollar soaring to 109.85, CNH briefly broke above 7.36. The PBOC then took measures, issuing 60 billion yuan in offshore bonds to drain liquidity and stabilizing the midpoint. On December 15, CNH broke below 7.05, rebounding over 4% from the year’s high, reaching a nearly 13-month high.

Conclusion: Grasp the Big Trend, Capture Probabilistic Gains

As China enters a sustained easing cycle in its monetary policy, USD to RMB has shown a clearer trend. Based on similar past cycles, this can last for about ten years, with short- and medium-term fluctuations driven by USD movements and other events. Investors who focus on the key factors above can greatly improve their chances of profit.

The forex market is primarily macro-driven, with transparent data from various countries, large trading volumes, and support for two-way trading, making it relatively fair for ordinary investors.