After breaking 7, will the RMB continue to rise in 2026? Major institutions' outlook

**Exchange rate hits new high, how the market is betting**

Half of December has just passed, and the performance of the RMB against the US dollar has caught many traders' attention. The offshore RMB (USD/CNH) fell to 6.9965, and the onshore RMB (USD/CNY) dropped to 7.0051, marking a rare strong trend since mid-2023. In just a few weeks, the USD to RMB exchange rate has hit a new low since September 2024.

What is behind the data? Three forces are at play:

**The US dollar is weakening, and the RMB is leveraging this**

The Federal Reserve's interest rate cut cycle is advancing, and the US dollar index has fallen over 10% this year. This is not short-term volatility but an adjustment of the entire monetary system. With the dollar under pressure, other currencies naturally gain relative strength. In this wave of de-dollarization, the RMB's strength is as natural as water flowing downhill.

**The central bank is guiding, and the exchange rate has an intention**

This year, China's central bank has frequently increased the RMB's midpoint rate, not passively following the market but actively signaling. This "visible hand" is guiding expectations, and the market is gradually adjusting its trading strategies. The central bank's attitude is clear: the RMB has room to appreciate.

**Year-end foreign exchange conversion wave arrives, companies are exchanging**

The huge trade surplus accumulated by China in 2025 is being converted at the end of the year. Export companies and multinational corporations are converting USD positions before year-end, creating seasonal foreign exchange conversion effects that generate additional demand for the RMB. Tight liquidity in the offshore market further amplifies this effect.

Wang Qing, Chief Macro Analyst at Orient Securities, pointed out, "The recent strength of the RMB is mainly driven by the US dollar's weakness and seasonal foreign exchange conversions by exporters. Interestingly, the RMB's appreciation itself is enhancing China's capital market attractiveness to international investors, creating a virtuous cycle."

**The story in 2026 is not over yet**

Interestingly, despite the RMB reaching new highs, based on purchasing power parity and trade-weighted exchange rates, the RMB still seems undervalued.

ANZ senior strategist Xing Zhaopeng predicts that in the first half of 2026, USD to RMB will fluctuate between 6.95 and 7.00—in other words, there is still room for the RMB to appreciate.

Goldman Sachs offers an even more aggressive view. They believe the RMB is undervalued by about 25% relative to economic fundamentals, expecting USD to RMB to fall to 6.90 by mid-2026, and further to 6.85 by the end of the year. According to this logic, the RMB has an appreciation potential of about 1.5-2%.

Bank of America’s outlook is the most optimistic. They believe that easing US-China relations will boost exporters' confidence, and the scale of domestic companies selling USD will further expand in 2026. They forecast USD to RMB will fall to 6.80 by the end of 2026, implying an RMB appreciation potential of 3%.