Rabobank Sees Yuan Appreciation Slowing Amid Concerns Over Demand

Rabobank's latest forecast suggests that the Chinese Yuan will continue to strengthen against the US Dollar, but at a slower pace than previously expected. The bank predicts that the USD/CNY exchange rate will reach 6.70 in both three and six months, before declining to 6.65 over the next year.

This represents a modest further appreciation of around 0.8% from the current rate of 6.7050. Rabobank's forecast is based on its assessment of China's economic recovery, which it describes as 'improving activity' but notes that there are still questions over demand.

The bank points to a rebound in business sentiment and a return to expansion for China's official manufacturing PMI. However, it cautions against treating this as proof of a durable demand recovery, noting that the increase in client demand was mainly driven by companies accumulating precautionary inventories.

Rabobank also reports improving services activity and continued employment growth, but its broader forecasts envisage economic growth slowing from 4.5% in 2026 to 4.2% in 2027. The bank has reduced the amount of additional monetary easing it expects, citing concerns over financial stability.