The Renminbi exchange rate hits a 15-month high, two-way fluctuations may be the norm.

On December 25th, the foreign exchange market saw a significant moment as the offshore Renminbi (RMB) broke through the key level of "7" against the US dollar at the opening, reclaiming this important integer level for the first time since October 2024. The highest intraday rate reached 6.9985, the highest in 15 months. At the same time, the onshore RMB against the US dollar also strengthened, approaching the "7" level, reaching 7.0066, the highest since September 2024. Since 2025, with the weakening of the US dollar, the RMB exchange rate has entered a significant appreciation channel, showing a clear unilateral appreciation trend after late November. "7 is more of a mathematical significance. There is not much difference between 6.9 and 7.1. The market doesn't need to overreact," said Guan Tao, Global Chief Economist at Bank of China Securities. Guan Tao believes that the recent appreciation of the RMB is due to short-term bullish factors dominating, and does not mean the start of a new appreciation cycle. Overall, it is highly probable that the RMB exchange rate will not show a unilateral trend next year, but rather fluctuate around 7. The final trend of the RMB exchange rate will mainly depend on three major factors: the relative strength of the economic recovery of China and the United States, trends in US interest rates and exchange rates, and the evolution of China's foreign trade relations and domestic economic recovery. The market should not be overly fixated on specific price predictions, nor should it form linear expectations of unilateral appreciation or depreciation. Two-way exchange rate fluctuation will become the norm.