Global banks lift yuan forecasts as export strength fuels appreciation

HSBC cut its year‑end yuan forecast to 6.65 per dollar, down from 6.75, while Deutsche Bank now sees the currency at 6.55 by the end of 2026, and Goldman Sachs nudged its 12‑month target to 6.50, all reflecting a sharper outlook for the renminbi amid robust export performance and steadier U.S.–China trade relations [1].

The three banks point to a mix of external and domestic factors. HSBC highlighted China’s “highly competitive exports” and a “fundamental case for modest further yuan appreciation,” adding that the internationalisation of the RMB and a long‑term diversification away from the dollar are structural supports. It also noted that U.S.–China economic ties have become “stable and more constructive since May 2025,” a sentiment that underpins its optimism [1]. Deutsche Bank’s economists Yi Xiong and Deyun Ou argued that a surge in China’s imports of upstream products will likely trigger a rebound in export orders and domestic demand, giving the yuan further upside momentum [1]. Goldman Sachs, while acknowledging headwinds from the Iran war and higher energy costs, said the medium‑term outlook remains positive because global investment in energy security and renewables should bolster China’s export competitiveness, allowing the yuan to reach 6.80, 6.70 and 6.50 in three, six and twelve months respectively—tighter than its prior 6.85, 6.80 and 6.70 targets [1].

These revisions come as the onshore yuan has already appreciated nearly 3% against the dollar this year, trading around 6.8040 per dollar, and is up about 2.6% versus its major trading partners. The currency’s rise reflects not only the export‑driven trade surplus but also expectations that China’s monetary policy will remain accommodative, a view echoed in separate commentary that policy easing will support demand without forcing sharp depreciation [2]. Together, the forecasts suggest that market participants see the yuan’s trajectory as more resilient than previously thought, even as geopolitical tensions and potential tariff risks linger.

If the yuan continues to strengthen, Chinese exporters could benefit from lower foreign‑currency costs, while import‑heavy firms may face tighter margins. The real question now is whether the upward bias can survive renewed geopolitical shocks or a shift in U.S. monetary policy that could re‑anchor the dollar’s dominance.