Caitong Securities(SH:601108) Hua Er Jie Jian Wen·2026-02-25 11:28Core Viewpoint - The recent appreciation of the Renminbi (RMB) is primarily driven by the weakness of the US dollar, supported by the RMB's own fundamentals, with expectations for continued appreciation as long as the dollar's credit remains unhealed [1][4][21]. Group 1: RMB Exchange Rate Dynamics - The onshore RMB broke the 6.87 mark against the USD, reaching 6.8658, while the offshore RMB was at 6.8628, with daily gains exceeding 150 points [4]. - The appreciation is attributed to three main factors: stabilization of Sino-US trade relations, continued weakness of the USD boosting non-USD currencies, and concentrated demand for currency exchange from exporting companies [4][22]. - Financial institutions like Goldman Sachs and HSBC have set RMB targets at 6.70 and 6.85 respectively, indicating a potential undervaluation of around 22% [4][29]. Group 2: Underlying Economic Factors - The RMB's fundamentals are strong, with a projected current account surplus of 3.7% of GDP in 2025, expected to rise to 4.3% in 2026, supporting further appreciation [25][29]. - The RMB's exchange rate is considered deeply undervalued, with strong performance in exports contributing to its appreciation [25]. - The seasonal increase in currency exchange demand from exporters has accelerated the RMB's appreciation, with a notable surge in December 2025 [22]. Group 3: US Dollar Weakness and Its Implications - The core logic behind the RMB's appreciation is the weakening of the USD, driven by market distrust in US sovereign credit and long-term economic stability [11][21]. - The US dollar index is projected to decline by 9.4% in 2025, while the RMB appreciates only 4.3% against the dollar, indicating a relative strengthening of the RMB [7][11]. - The potential for the USD to stabilize in 2026 raises concerns about the sustainability of the RMB's appreciation momentum [4][21]. Group 4: Future Projections and Central Bank Interventions - Financial institutions predict that the RMB could reach levels around 6.8, contingent on continued high demand for currency exchange [27]. - The central bank is expected to intervene to prevent excessive unilateral appreciation of the RMB, maintaining a balance in export trade [29]. - The overall pressure on exports is manageable, with anticipated growth rates around 3.0% in 2026 despite potential appreciation [29].