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Goldman Sachs has rolled forward its USD/CNY forecasts but kept its underlying view unchanged: the Chinese currency should gradually strengthen over the coming year. The bank now projects USD/CNY at 6.95 in three months, 6.90 in six months and 6.85 in twelve months, arguing that the renminbi remains undervalued and supported by improving macro fundamentals.Goldman says that while China’s domestic recovery is still uneven, its external picture has started to firm, with export momentum stabilising and growth expectations turning slightly more constructive. They also highlight the People’s Bank of China’s steady hand, guiding the fixing lower in a controlled, forward-consistent manner, as evidence that policymakers are comfortable with a slow, managed appreciation path.The bank adds that the fixing’s “gradual descent,” combined with better macro indicators, supports extending their appreciation call further into 2026, reinforcing the view that the CNY is likely to grind stronger rather than deliver sharp moves. —Goldman’s call supports a modestly stronger CNY profile, implying limited upside for USD/CNY and signalling steadier policy anchoring from the PBoC — a potential stabiliser for broader Asia FX.
This article was written by Eamonn Sheridan at investinglive.com.
💡 DMK Insight
Goldman Sachs’ updated USD/CNY forecasts signal a potential shift in currency dynamics that traders can’t ignore. With projections of 6.95 in three months and a gradual strengthening to 6.85 in twelve months, the bank’s stance reflects a belief in the renminbi’s undervaluation. This could impact forex traders focusing on USD/CNY pairs, especially those employing swing trading strategies. If the renminbi does appreciate as forecasted, traders should watch for resistance levels around 6.90 and 6.85, which could trigger profit-taking or position adjustments. Additionally, this outlook may ripple through related markets, particularly commodities priced in dollars, as a stronger renminbi could affect China’s import costs and demand dynamics. However, it’s worth questioning whether external factors, like geopolitical tensions or global economic shifts, could derail this bullish sentiment. Keep an eye on upcoming economic data from China and the U.S. that might influence these projections. Traders should monitor the USD/CNY pair closely, especially around key economic announcements, to gauge market sentiment and potential volatility.
📮 Takeaway
Watch for USD/CNY to test resistance at 6.90 and 6.85 as Goldman Sachs’ bullish forecast unfolds over the next year.
