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    Chris Turner from ING states that the renminbi is gaining from exporter flows and possible portfolio inflows.

    by VT Markets
    /
    Dec 3, 2025
    The USD/CNH is on a downward trend, starting even before the US Dollar weakened. This fall may be due to exporter activities and potential investments in Chinese portfolios, which could strengthen the renminbi. There’s some confusion about whether this trend comes from foreign investments in China or Chinese exporters cashing in their earnings. Local authorities control the USD/CNY and seem to be allowing the renminbi to rise.

    Possibility of a Stronger CNY

    Local authorities might prefer a stronger CNY to encourage domestic spending and move away from relying on exports. Analysts predict that the USD/CNY rate could reach 6.90 next year. This outlook comes from market reviews and expert economic forecasts, highlighting how USD/CNH changes may affect CNY’s future value in line with China’s economic goals. The USD/CNH pair continues to drop, recently hitting 7.05. This decline is backed by surprisingly strong Caixin Manufacturing PMI figures for November 2025, which reached 51.2. This suggests that the Chinese economy is robust, supporting the yuan’s strength. We think authorities are fine with this gradual rise, showing a clear change from their earlier defensive strategy in 2023 and 2024. Back then, the PBoC often set high daily reference rates to stop the yuan from weakening. Their current relaxed stance indicates a shift in focus toward boosting domestic consumption.

    Growing Weakness in the US Dollar

    The trend is also driven by a weakening US dollar. The latest CPI data for October 2025 revealed inflation falling faster than expected to 2.7%, which is encouraging market speculation about Fed rate cuts in early 2026. This negative sentiment towards the dollar is helping the yuan strengthen. In the coming weeks, we see good opportunities for strategies that benefit from a slow decline and low volatility in USD/CNH. Selling out-of-the-money call options with strikes around 7.15 or 7.20 for January and February 2026 could be a way to earn premium income. Alternatively, traders might look at put option spreads to aim for a move towards the 7.00 level while managing risk. Create your live VT Markets account and start trading now.

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