Goldman Sachs' model weighted average shows that the Renminbi is undervalued by 25%, referred to as one of the "highest conviction" trades.

Goldman Sachs stated that the Renminbi is undervalued by 25%, and its appreciation will exceed the pricing indicated by forward contracts. This Wall Street institution referred to the Renminbi as one of its "highest conviction" trades, stating that it is undervalued based on its predicted exchange rate model. The model aims to predict the optimal exchange rate level needed to maintain China's economic fundamentals, including stable current account balances, economic growth, and stable prices. Factors such as the weakening US dollar, capital inflows into the mainland stock market, the internationalization of the Renminbi, and a stronger midpoint price are driving expectations for both onshore and offshore Renminbi to achieve their first annual appreciation since 2021.