The CNY unexpectedly 'overtakes' the USD, signaling a bright outlook for the Chinese economy in the second half of the year.

Market optimism for China's currency continues to grow as analysts predict further appreciation of the yuan against the US dollar in the near future. (Source: Medium)

On July 1, the People's Bank of China set its daily reference rate at 7.1534 yuan per dollar - up from Monday's 7.1656 and the highest since early November 2024.

In June 2025, the yuan appreciated 0.41% against the greenback, bringing the cumulative increase to 1.2% in the second quarter and 1.86% in the first half.

"Compared to late April, domestic clients have become less pessimistic about China's near-term growth prospects as macro data have recovered from previous concerns, despite a significant divergence between exports and domestic demand," Goldman Sachs analyst Lisheng Wang wrote in a report on June 29.

In contrast to the bright colors of the Chinese economy, investors are increasingly concerned about the US government debt situation, and predict that the dollar will continue to depreciate amid declining confidence in the government, loose fiscal policy and high long-term funding costs.

Wall Street investment banks predict the yuan will likely strengthen further, surpassing 7 yuan per dollar in the next six months.

China's currency has seen significant volatility in 2025, sliding to a weakest level of 7.3506 yuan per dollar on April 9 - as the tariff war between the world's two largest economies escalated.

The currency started to recover after the US-China trade truce and progress made after talks held in London in June.

The total trading range of the yuan in the first half of the year was about 2.6%.

Domestic sentiment is improving, with expectations that ongoing talks between Washington and Beijing will help support the country's exports in the second half of the year, expert Lisheng Wang noted.

Citic Securities, China's top investment bank headquartered in Beijing, said the yuan has remained relatively stable since June 2025 amid a weakening US dollar.

A study released on June 27 predicted that the yuan is likely to remain in a state of low volatility in the short term.

While remaining US tariffs on Chinese goods continue to weigh on exports, the yuan's exchange rate will depend more on domestic policy support - especially consumer spending - and progress in trade talks between Beijing and Washington, according to Citic Securities.

Source: https://baoquocte.vn/dong-ng-ndt-bat-ngo-vuot-mat-usd-bao-hieu-trie-n-vong-sang-cua-kinh-te-trung-quoc-nu-a-cuoi-nam-319591.html