Wang Qing, chief macro analyst at Dongfang Jincheng, believes that the continuous appreciation of the RMB will increase the attractiveness of the domestic capital market to foreign capital, which will directly increase the foreign exchange earnings of foreign capital.
Regarding the appreciation of the RMB against the USD, Wang Qing stated there are several direct reasons: Firstly, around the Fed's interest rate cut on December 11, the US dollar index continued to weaken, falling below 100. The background is the market's rising expectation of continued interest rate cuts by the Fed in 2026, which has driven a general appreciation of non-USD currencies including the RMB. Secondly, as the year-end approaches, the demand for corporate foreign exchange settlement increases, which also drives the seasonal strength of the RMB; especially after the recent continuous appreciation of the RMB against the USD, the accumulated demand for foreign exchange settlement from high export growth in the previous period may be released more rapidly. In addition, the recent continuous strengthening of the RMB exchange rate has also boosted market sentiment, further pushing up the RMB exchange rate.
Wang Qing stated that for foreign trade enterprises, although the RMB has appreciated against the USD recently, it is recommended that foreign trade enterprises do not bet on a one-sided trend of the RMB exchange rate, but should still focus on their core business and make use of foreign exchange derivatives such as options and futures to manage exchange rate fluctuation risks.