China - CNY appreciation delayed, not derailed

Research evidence excerpt

China - CNY appreciation delayed, not derailed

FICC Research

FX Strategy

23 July 2026

FX Insight

China - CNY appreciation delayed,

not derailed

The pause in CNY appreciation should not be mistaken for a Mitul Kotecha

turning point. While official resistance is likely to limit the + 65 6308 5439

mitul.kotecha@barclays.com

pace of gains, ongoing exporter USD conversions should Barclays Bank, Singapore

continue to provide support. We maintain our constructive Audrey Ong

CNY view and remain long CNHINR. + 65 6308 5637 audreysz.ong@barclays.com

Barclays Bank, Singapore

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CNY appreciation has stalled for now. There was some excitement when USDCNY broke below

6.80 in early May, followed by further fanfare when the daily fixing was set below this level on 10

July—the strongest CNY fixing against the USD since February 2023. However, the break below

6.80 did not mark the start of another sharp leg of CNY appreciation; instead, it has been

followed by a period of consolidation.

We believe the medium-term outlook for the CNY has not changed materially and continue

to expect gradual appreciation against the USD following this near-term pause. We maintain our

forecast for USDCNY at 6.65 by end-2026, modestly stronger than forwards, although this

implies a slower pace of appreciation than seen in recent months. Our rationale is as follows:

1) The PBoC continues to lean against the pace of appreciation.