SHANGHAI, May 18 (Reuters) - Some global investment houses revised up their yuan forecasts, fuelled by China's export competitiveness and steady trade relations with the U.S., the world's biggest economy.
The Chinese currency has been grinding higher this year, rising nearly 3% against the dollar so far to 6.8040 per dollar on Monday, and is up about 2.6% versus its major trading partners (.CFSCNYI), opens new tab.
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HSBC bets on a fundamental case for modest further yuan appreciation and has raised its forecasts to 6.65 per dollar by year-end from 6.75 previously.
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On top of highly competitive exports, "RMB internationalisation, long-term diversification from USD and economic rebalancing are key domestic structural themes supporting the RMB. Externally, U.S.-China economic relations have become stable and more constructive since May 2025," HSBC analysts said in a note.
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Deutsche Bank expects this year's strong Chinese import growth to pave the way for further yuan gains.
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"A surge in China's imports of upstream products will likely be followed by a further pickup in export orders, or a recovery of domestic demand, or both," Deutsche Bank economists Yi Xiong and Deyun Ou said in a note.
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Deustche Bank's baseline forecast is for the currency to strengthen to 6.55 per dollar at end-2026 from 6.7 previously.
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Goldman Sachs also sees scope for further and "longer-lasting" yuan strength, underpinned by China's unprecedented external surplus and strong export competitiveness.
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Despite headwinds from the Iran war and higher energy costs, Goldman said the medium-term outlook remains positive, supported by expected global investment in energy security and renewables, which would benefit China's exports.
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The U.S. bank expects the yuan to hit 6.80, 6.70 and 6.50 per dollar in three, six and 12 months, compared to 6.85, 6.80 and 6.70 previously.
Reporting by Shanghai Newsroom Editing by Shri Navaratnam
Source: Reuters