Outlook
Outlook: The yuan is likely to stay broadly stable in the near term with a modest upside bias into 2026, supported by policy stability and China’s dedollarization push. Policy measures and stimulus are expected to anchor volatility, while global institutions have signaled a gradual yuan appreciation possibility as rate differentials and stability persist.
Key drivers
Key drivers:
- PBOC's digital yuan framework implemented January 1, 2026, strengthening management and infrastructure for domestic and cross-border use.
- Central Economic Work Conference (December 2025) emphasized yuan stability, signaling potential interventions to prevent sharp moves.
- Global institutions forecast yuan to be stable with upside bias in 2026, citing the PBOC’s ability to stabilise the rate under pressure.
- China's dedollarization efforts continue, promoting yuan use in international trade and finance and reducing reliance on the U.S. dollar.
Range
Range:
CNY to USD is at 7-day lows near 0.1447, 1.3% above its 3-month average of 0.1429, having traded in a very stable 3.0% range from 0.1407 to 0.1449.
CNY to EUR is at 30-day highs near 0.1230, just 1.0% above its 3-month average of 0.1218, having traded in a very stable 3.7% range from 0.1195 to 0.1239.
CNY to GBP is at 90-day highs near 0.1076, 1.3% above its 3-month average of 0.1062, having traded in a very stable 3.6% range from 0.1039 to 0.1076.
CNY to JPY is at 7-day highs near 22.46, just 0.7% above its 3-month average of 22.3, having traded in a quite stable 4.2% range from 21.90 to 22.81.
What could change it
What could change it:
- Further shifts in US monetary policy or dollar strength could alter USD/CNY dynamics and yuan direction.
- Additional PBOC policy tweaks or liquidity support could anchor or push the yuan higher.
- Progress in dedollarization and greater yuan international use could provide structural upside support.
- Domestic data surprises or policy shifts in China (growth, real estate stabilization, stimulus) or evolving global trade conditions could impact the rate path.
