Commerzbank’s Volkmar Baur anticipates that the Chinese Yuan (CNY) will gradually appreciate against the US Dollar (USD), while remaining undervalued versus most other currencies, particularly the Euro [1]. The bank projects USD/CNY at 6.90 by June 2026 and 6.70 by late 2027, with EUR/CNY expected to remain broadly stable [1]. This outlook is underpinned by strong Chinese exports, a large current account surplus, and state-directed bank flows, which support the managed stance of the currency [1].
Since early April of last year, the CNY has appreciated almost continuously against the USD, but this trend shifted with the onset of the Third Gulf War, after which USD/CNY has moved sideways [1]. In periods of significant global economic or geopolitical upheaval, the CNY tends to stabilize against the USD [1].
Commerzbank maintains its assessment that the Chinese government is likely to favor a gradual appreciation of the CNY against the USD. This strategy aligns with the political goal of internationalizing the CNY, as steady appreciation incentivizes investors to hold assets denominated in the currency [1]. However, a slight appreciation against the USD in the current global environment is expected to result in depreciation against most other currencies, especially the Euro, keeping the CNY significantly undervalued and supporting China’s export economy [1].
CONCLUSION
Commerzbank expects the Chinese Yuan to edge higher against the US Dollar over the next few years, driven by strong exports and government policy. Despite this, the CNY is projected to remain undervalued versus other major currencies, supporting China’s export competitiveness. The gradual appreciation is seen as part of China’s broader goal to internationalize its currency.