Morgan Stanley has raised its outlook for China’s yuan, forecasting it will strengthen to about 6.85 per U.S. dollar in the first quarter of 2026, before easing to around 7.0 by year-end.
The bank cited strong export growth and near-term weakness in the U.S. dollar as key drivers. Morgan Stanley expects Chinese export volumes to grow 5 to 6 percent through 2026 and 2027, supported by improving global demand and better price competitiveness.
Anticipated Federal Reserve rate cuts are also expected to weigh on the dollar.
However, the bank warned that domestic deflation and a slowing Chinese economy would limit sustained gains.
China’s central bank recently set the yuan’s midpoint at its strongest level in over 15 months.
Other major banks echoed a cautious view. ING projected a 2026 trading range of 6.85 to 7.25, while Goldman Sachs said appreciation would likely be gradual and volatile.
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— Caixin Global (@caixin) January 9, 2026
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TIPP Staff
