Outlook
The yuan sits near multi-month highs against the dollar, helped by policy steps and China’s ongoing push to internationalize the renminbi. In the near term, moves will be shaped by the US rate path and domestic data releases. A stable policy backdrop from the PBOC and continued yuan usage expansion could help keep volatility subdued, even as external factors test the pair.
Key drivers
- PBOC reference rate adjustment on February 11, 2026: the fix was 0.1% stronger than the previous day, reflecting the central bank’s active management of the yuan amid global currency shifts.
- China’s commitment to yuan stability: officials signaled a priority on keeping the yuan steady, suggesting potential interventions to limit sharp swings in USD/CNY.
- Digital yuan management framework: effective January 1, 2026, the new framework enhances oversight and operations of the digital currency, supporting broader yuan internationalization.
- Global shift toward yuan usage: 2025 saw China promote yuan in international trade, including a major move toward yuan in Russia–China commerce, reducing reliance on the U.S. dollar.
- Ongoing yuan internationalization push: broader efforts to reduce dollar dependence are underpinning yuan resilience amid external dollar movements.
- US rate-path expectations: Powell left the door open to a cut later this month, and markets broadly expect a Fed rate cut. The resulting USD trajectory will influence USD/CNY and related pairs.
- Price action context: CNY to USD remains near 90-day highs, with the pair around 0.1456 (USD per CNY), about 1.7% above its 3-month average of 0.1432 and trading in a tight 3.1% range (0.1412–0.1456). Similar patterns are seen in the other major pairs, reflecting evolving risk sentiment and policy stance.
Range
CNY to USD: 0.1456; 3-month avg 0.1432; range 0.1412–0.1456
CNY to EUR: 0.1232; 3-month avg 0.1219; range 0.1195–0.1239
CNY to GBP: 0.1074; 3-month avg 0.1062; range 0.1039–0.1076
CNY to JPY: 22.74; 3-month avg 22.34; range 21.90–22.81
What could change it
- PBOC policy shifts: unexpected adjustments to the reference rate, daily band, or liquidity measures could alter volatility and direction.
- US data and Fed policy: stronger or weaker US data or a shift in Fed guidance on rates could move USD/CNY and related pairs.
- domestic data surprises: stronger-than-expected Chinese growth, inflation, or credit data could support the yuan; softer data could ease it.
- progress in yuan internationalization: new cross-border settlement rules or more official adoption of the yuan in trade could bolster yuan steadiness.
- geopolitical developments: increased tensions or sanctions affecting global risk sentiment can impact the USD and CNY dynamics.
