SHANGHAI, May 18 - Several large global investment banks have revised upward their outlooks for the Chinese yuan, pointing to the currency's export-driven strength and improving trade dynamics with the United States. The yuan has been steadily appreciating this year, climbing nearly 3% against the dollar to 6.8040 per dollar on Monday, and is up about 2.6% versus its major trading partners.
HSBC now expects modest further appreciation of the yuan on a fundamental basis and has lifted its year-end forecast to 6.65 per dollar from a prior projection of 6.75. In explaining the upgrade, HSBC analysts wrote that several domestic structural themes support the currency. "RMB internationalisation, long-term diversification from USD and economic rebalancing are key domestic structural themes supporting the RMB. Externally, U.S.-China economic relations have become stable and more constructive since May 2025," the analysts said in a note.
Deutsche Bank has also adjusted its outlook, citing strong Chinese import growth this year as a catalyst for additional yuan appreciation. Economists Yi Xiong and Deyun Ou noted that "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," signaling a chain of developments that could sustain currency gains. Deutsche Bank’s baseline forecast is for the currency to strengthen to 6.55 per dollar at end-2026 from 6.7 previously.
Goldman Sachs adds to the chorus of forecasters seeing further yuan strength. The U.S. bank pointed to China’s "unprecedented external surplus and strong export competitiveness" as foundations for potential extended appreciation. Goldman acknowledged external headwinds, noting that the Iran war and higher energy costs could present challenges, but it said the medium-term outlook remains constructive. The bank also cited anticipated global investment in energy security and renewables as developments that would support China’s export sector.
Goldman’s short- and medium-term trajectory for the yuan was upgraded across multiple horizons. The bank now expects the yuan to reach 6.80, 6.70 and 6.50 per dollar in three, six and 12 months, respectively, compared with previous forecasts of 6.85, 6.80 and 6.70.
Collectively, these revisions reflect a view among several large financial institutions that China's trade performance and shifts in external relations provide a platform for the yuan to strengthen further. Analysts emphasize both domestic structural factors - such as partial de-dollarisation themes and policy-driven economic rebalancing - and external drivers like export competitiveness and surplus dynamics.
At the same time, forecasters acknowledge specific headwinds. Geopolitical tensions and elevated energy prices are cited by at least one major bank as factors that could weigh on the short-term path. Nevertheless, the three institutions surveyed see scope for continued appreciation from current levels.
Market participants watching the currency will be focused on incoming trade and import data, any shifts in U.S.-China economic engagement, and developments in global energy markets, all of which analysts indicate will help determine the persistence and magnitude of further yuan moves.