Offshore RMB rises, industry insiders warn companies not to bet on one-way exchange rate movements.

Wang Qing, Chief Macro Analyst of Orient Securities, believes that the continuous appreciation of the renminbi will increase the attractiveness of the domestic capital market to foreign investors, directly increasing the exchange gains of foreign investments. Regarding the appreciation of the renminbi against the US dollar, Wang Qing pointed out several direct reasons: first, after the US Federal Reserve's interest rate cut on December 11, the US dollar index continued to weaken, falling below 100. This was due to the market's expectation of further interest rate cuts by the Federal Reserve in 2026, which led to a general appreciation of non-US currencies, including the renminbi. Secondly, approaching the end of the year, the demand for corporate foreign exchange settlement has increased, driving the seasonal strength of the renminbi; especially after the recent continuous appreciation of the renminbi against the US dollar, the accumulated settlement demand from previous high export growth may be accelerating. In addition, the recent continuous strengthening of the renminbi exchange rate has also boosted market sentiment, further pushing up the renminbi exchange rate. Wang Qing suggested that for foreign trade enterprises, although the renminbi has appreciated against the US dollar recently, it is advisable not to speculate on the one-way trend of the renminbi exchange rate. Instead, they should stick to their core business and use forex derivative instruments such as options and futures as much as possible to control exchange rate fluctuation risks.