Is it worth exchanging RMB for USD? Analysis of the 2026 exchange rate trend and new opportunities

Since the start of 2026, the RMB exchange rate trend has continued to attract investor attention. After three consecutive years of depreciation from 2022 to 2024, the RMB finally broke the psychological barrier of 7.0 at the end of 2025, and is now entering a new appreciation cycle between 6.96 and 6.97. For investors looking to exchange RMB for USD, this turning point raises an important question: is now the right time to do so?

According to the latest forecasts from major international investment banks, the RMB is expected to further strengthen in 2026, reaching between 6.70 and 6.85, meaning the RMB against the dollar will continue to appreciate. In this context, exchanging RMB for USD now appears relatively reasonable, but the key lies in understanding the logic and risks involved.

The Current State of the RMB in 2026: A New Pattern After Breaking 7.0

Throughout 2025, the USD/RMB exchange rate fluctuated within a wide range of 6.95 to 7.35, with an overall appreciation of about 4%. Entering early 2026, the RMB has shown even stronger performance. Especially after the Federal Reserve initiated a new easing cycle, the dollar index fell from a high of 109 to the current range of 98.2 to 98.8, creating a favorable external environment for RMB appreciation.

As of mid-February, offshore RMB (CNH) has stabilized around 6.96, indicating that the RMB exchange rate has thoroughly reversed the downward trend from the second half of 2025. Notably, the 6.9 level has provided strong support, significantly reducing the short-term risk of breaking back above 7.1. The market is now seeking a new balance between 6.90 and 7.00, creating a relatively stable trading environment for those looking to hold USD.

Reasons Why Now Is the Best Time to Exchange RMB for USD

First reason: The RMB appreciation cycle is established

From a macro perspective, the RMB exchange rate may be at a turning point. The depreciation cycle that began in 2022 has ended, and a new medium- to long-term appreciation trend is underway. This means that exchanging RMB for USD now is akin to entering a position at a relatively low point. As the RMB continues to appreciate, the amount of USD obtained per unit of RMB will decrease, but the USD’s purchasing power globally will remain stable, making this a relatively advantageous timing.

Second reason: Stable China-U.S. trade relations

In early 2026, China-U.S. trade negotiations made new progress. The U.S. will reduce tariffs on Chinese goods related to fentanyl from 20% to 10%, and temporarily suspend measures such as rare earth export controls. Although this balance remains fragile, the short-term improvement in China-U.S. relations reduces market uncertainty and alleviates downward pressure on the RMB. This provides a relatively predictable environment for exchanging RMB for USD.

Third reason: The dollar index remains weak

The dollar index fell to 98 in the first half of 2025, then rebounded above 100 in November. However, as the Federal Reserve shifted toward easing monetary policy in 2026, the dollar index retreated again. This structural weakness is expected to persist through 2026, meaning the USD will not significantly strengthen, reducing the risk of a sharp dollar rally when exchanging RMB for USD.

Four Key Factors Influencing the RMB/USD Exchange Rate

1. The dollar index and Fed policy

The dollar’s trajectory directly influences the RMB/USD rate. Market expectations for 2026 include 2-3 rate cuts by the Fed. As the labor market stabilizes, the Fed’s focus shifts from controlling inflation to preventing a hard landing. This preemptive easing weakens U.S. bond yields, encouraging capital to flow back into emerging markets, which supports RMB appreciation.

Historical comparison: In 2017, the eurozone’s strong economic recovery and ECB signaling tightening led to a 15% decline in the dollar index, and USD/RMB also fell accordingly, illustrating their close correlation.

2. Progress in China-U.S. trade negotiations

Whether the substantive improvement in China-U.S. trade relations can continue is the most critical external uncertainty. If the current situation persists, the RMB exchange rate environment is likely to remain stable; if tensions escalate, markets will face renewed pressure. Currently, the positive impact of this factor is evident, but ongoing monitoring is necessary.

3. The People’s Bank of China’s monetary policy stance

China’s monetary policy leans toward easing to support economic recovery. The PBOC may cut interest rates or reserve requirements to inject liquidity. While this short-term easing can exert downward pressure on the RMB, if such policies, combined with stronger fiscal stimulus, stabilize China’s economy, the long-term outlook for the RMB will improve. This short-term versus long-term divergence is notable, but the overall direction in 2026 favors economic stabilization and RMB strength.

4. China’s export resilience and foreign capital inflows

China’s export growth remains resilient, and the trend of foreign capital reallocating into RMB assets is strengthening. These factors jointly support RMB appreciation. As China’s economy maintains steady growth, foreign investment inflows will continue, increasing demand for RMB and pushing its value higher.

2026 RMB Exchange Rate Forecast and Investment Opportunities

According to analysis from international investment banks, the RMB’s future trend is supported by three main factors:

Support 1: Continued resilience of China’s exports

In 2025, China’s exports demonstrated strong resilience despite global trade uncertainties, maintaining competitiveness and providing solid support for the RMB.

Support 2: Rebound of foreign investment in RMB assets

As China’s steady growth policies take effect, foreign investors’ interest in RMB assets is rising again. Institutional investors are increasing their RMB holdings, boosting demand.

Support 3: Structural weakness of the dollar

The trend of de-dollarization globally and the Fed’s dovish stance offset the short-term momentum for USD rebound. The structural weakness of the dollar index is expected to continue through 2026.

Based on these factors, Deutsche Bank predicts that the RMB will enter a long-term appreciation cycle, with a forecast of 6.7 against the dollar in 2026. Goldman Sachs is even more optimistic, expecting the RMB to reach 6.85 in 2026 under policy support.

This suggests that from the current level of 6.96, the RMB could further appreciate to the 6.70–6.85 range. For investors exchanging RMB for USD, this means buying USD at a relatively high point, which can serve as a hedge.

Three Major Variables Investors Should Watch

Variable 1: Downside potential of the dollar index

Future focus should be on whether Fed’s 2026 rate cuts will further weaken the dollar and how much room the dollar index has to decline. If rate cuts exceed expectations, the dollar could weaken further, providing more room for RMB appreciation.

Variable 2: Official policy signals on the exchange rate

Regulators may use the central parity rate to signal efforts to prevent rapid appreciation of the RMB. If the authorities attempt to control the pace of appreciation, the RMB may stabilize around 6.9.

Variable 3: Effectiveness of China’s steady growth policies

The impact of China’s 2026 growth policies on domestic demand and the stock market will directly influence the RMB’s long-term bottom. Effective policies will strengthen the RMB; limited effects could pose downside risks.

How to Judge the Best Timing for Exchanging RMB for USD

Investors can consider the following four aspects to determine the optimal timing:

1. Monitor the People’s Bank of China’s monetary policy

Easing policies (rate cuts or reserve requirement reductions) tend to weaken the RMB, while tightening (interest rate hikes or reserve increases) support its strength. For example, in late 2014, PBOC eased monetary policy multiple times, leading to the RMB weakening from around 6.2 to nearly 7.4 against the dollar.

2. Watch China’s economic data

Steady economic growth attracts foreign capital inflows, supporting the RMB. Key data include GDP, PMI, CPI, and fixed asset investment.

3. Observe USD trends and Fed moves

USD’s strength or weakness directly impacts USD/RMB. When the dollar index is weak, it’s more favorable to exchange RMB for USD.

4. Understand official policy signals

Since 1978, China’s exchange rate reforms have been guided by official signals. The 2017 central parity model adjustment, which incorporates a basket of currencies and counter-cyclic factors, enhances official guidance. Positive signals from authorities often indicate room for RMB appreciation.

Lessons from Historical Trends

The past five years offer valuable insights:

• 2020: Fluctuated between 6.9-7.0, dipped to 7.18 mid-year, then rebounded to around 6.50 by year-end, appreciating about 6%.
• 2021: Narrow range of 6.35-6.58, average around 6.45, maintaining strength.
• 2022: Rose from 6.35 to over 7.25, depreciating about 8%, the largest decline in recent years.
• 2023: Fluctuated between 6.83-7.35, averaging about 7.0, ending at 7.1.
• 2024: Rose from 7.1 to around 7.3 mid-year, with increased volatility.
• 2025: Ended three years of depreciation, appreciating about 4%.

This pattern indicates that RMB exchange rate cycles tend to last several years. The depreciation cycle starting in 2022 reversed at the end of 2025, and a new appreciation cycle has just begun. Historically, similar policy-driven cycles can last up to a decade, suggesting 2026 is likely the early stage of a long-term RMB appreciation cycle.

Onshore (CNY) vs. Offshore (CNH) RMB

It’s important to note that offshore RMB (CNH) trades more freely in international markets, with capital flows less restricted, reflecting global sentiment and often exhibiting larger fluctuations. Onshore RMB (CNY) is subject to capital controls and guided by the People’s Bank through daily fixing and interventions.

In 2025, despite multiple fluctuations, CNH showed an overall upward trend. Early in the year, US tariffs and a dollar index soaring to 109.85 caused CNH to dip below 7.36. The PBOC responded with measures such as issuing offshore bonds to stabilize liquidity. Since early 2026, CNH has strengthened further, breaking 6.95 on January 20, reaching a 14-month high.

Summary: Is It a Good Time to Exchange RMB for USD Now?

Based on the above analysis, exchanging RMB for USD now is relatively advantageous, for reasons including:

• The RMB appreciation cycle is confirmed, making current entry akin to buying USD at a relatively low point. As the RMB appreciates toward 6.70–6.85, the cost of converting RMB to USD will rise, so doing it now is more cost-effective.
• The dollar index remains structurally weak, reducing the risk of a sharp USD rally, providing a safer environment for RMB to USD exchanges.
• China-U.S. trade relations are stabilizing, significantly reducing short-term market uncertainties. The RMB exchange rate has been effectively contained within 6.9–7.0.
• From an investment perspective, exchanging RMB for USD is not just forex trading but also an asset allocation move. During an appreciation cycle, holding USD can hedge against currency risk.

However, investors should remain attentive to three key variables that could influence RMB exchange rates: the dollar index trajectory, official policy signals, and the effectiveness of China’s steady growth policies. By understanding and monitoring these factors, investors can significantly improve their chances of profiting from RMB to USD exchanges. The forex market is driven mainly by macro factors, with transparent data releases and large trading volumes, making it a relatively fair and accessible investment arena for individual investors.