Chinese Yuan: Outlook favours appreciation into 2027 – OCBC

USD/CNY is forecast to reach 6.62 by end-2026 and 6.46 by end-2027 by OCBC strategists Sim Moh Siong and Christopher Wong, who remain positive on the Chinese Yuan. Firmer PBoC fixings indicate increased policy tolerance for Renminbi (RMB) appreciation. The currency’s resilience in the face of broader US Dollar (USD) gains, alongside expectations that USD strength will ease, supports a gradual appreciation path. However, renewed USD rallies or weaker domestic growth pose risks to that outlook.

RMB appreciation gains policy support

"We maintain a constructive outlook on RMB, with USD/CNY projected at 6.62 at end-2026 and 6.46 at end-2027."

"The recent pattern of stronger PBoC fixings appears to suggest slightly greater policy tolerance for continued RMB appreciation, although we expect the pace to remain measured."

"RMB’s resilience despite broader USD strength also points to an increasingly constructive market bias towards appreciation, reinforcing expectations for further currency gains."

"We expect this appreciation trajectory to extend into 2027, supported by a gradual easing in USD strength, although periodic consolidation is likely."

"A renewed USD rally, softer domestic growth or a shift in the fixing trajectory could temper the pace of appreciation."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)