Huatai Securities: Renminbi appreciation is gradually entering a good trend.

Huatai Securities pointed out that after October, although the US dollar index rebounded slightly, the RMB against the US dollar exchange rate overall strengthened. On December 3, the offshore RMB broke through 7.06 during the trading session, reaching a 14-month high. Recently, the offshore RMB exchange rate has performed stronger than the central parity and onshore exchange rate, indicating that the market's expectation for RMB appreciation is heating up. Since May-June this year, the markets expectation for the RMB exchange rate has gone through a process of bottoming out, accumulating strength, and gradually recovering. Currently, the RMB appreciation, once a counter-consensus view at the beginning of the year, has gradually become the consensus of some market participants. With the recent downward adjustment of market expectations for the Fed rate cut basically in place, the fog of short-term weakening of China's apparent economic data is gradually dissipating, export growth remains strong, and the peak of foreign exchange settlement before the Spring Festival is approaching, the RMB appreciation is expected to enter a good phase. We maintain our forecast of the US dollar to RMB exchange rate of 6.82 by the end of 2026. Although there are still uncertainties in the short term, especially the decisions of the Fed and the Bank of Japan next week still have suspense, the implied path assumption of this forecast is that the RMB is approaching breaking 7.