Traders are more bullish on the yuan than at any point since 2011, with Deutsche Bank forecasting the currency will strengthen to 6.5 against the dollar by year-end
Chinese yuan hits three-year high with bullishness at 15-year peak
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The Chinese yuan has become the hottest bet in global foreign exchange markets, with trader sentiment reaching its most optimistic level since 2011 on the back of strong tech exports, a valuation discount and accelerating internationalisation.
The offshore yuan is trading around 6.77 per dollar, having gained over 3 percent against the dollar this year. Options market data tells the story clearly – the one-year USD/CNH risk reversal indicator stood at 0.37 percent on Tuesday, significantly favouring put options that bet on a weaker dollar.
Deutsche Bank head of emerging markets and Asia-Pacific research Sameer Goel has set a year-end target of 6.5, implying roughly 4 percent further upside from current levels.
Commonwealth Bank of Australia currency strategist Samara Hammoud holds a similar view, noting that the People’s Bank of China is demonstrating a clear willingness to see the yuan appreciate further. TS Lombard has gone further still, forecasting that the yuan could eventually break through 6.0 per dollar.
[See more: China’s services sector growth reaches three-month high]
Despite the recent rally, the yuan’s real effective exchange rate remains more than 13 percent below its historical peak reached in March 2022. It is only comparable to 2013 levels when China’s trade surplus was just one-fifth of its current size. Goel said Asia holds some of the world’s most undervalued currencies, saying, “We think this theme can continue.”
The yuan’s expanding role in global trade is adding structural demand. China’s Cross-Border Interbank Payment System recorded a daily average transaction volume of 920 billion yuan (approximately US$136 billion) in March – a new all-time high, up 48 percent from February.
DBS Group analysts noted the surge in yuan usage has been particularly pronounced since the outbreak of the Middle East conflict. The global AI investment boom is also driving Chinese tech exports, giving Beijing greater tolerance for a stronger currency.
UPDATED: 05 Jun 2026, 3:01 pm
