Currency traders are massively increasing bets on further strengthening the Chinese currency, expecting growth of about 5% by the end of the year. The market's target is 6.50 yuan per dollar.
On Thursday, February 26, the volume of trading in dollar/yuan options reached its maximum since the re-election of Donald Trump in November 2024. The volume of bets on strengthening the yuan is twice the volume of bets on its weakening.
Among the reasons for optimism is Beijing's position. The People's Bank of China sets reference rates that signal the authorities' readiness to allow the strengthening of the national currency. In 2025, the yuan has already grown by more than 4%.
In a January report, the U.S. Treasury called the yuan "materially undervalued," urging China to let the rate rise.
Despite fundamental support for growth, China is trying to avoid surges that are too steep. The authorities announced that from March 2 they will abolish the additional fee for playing against the yuan in the derivatives market, which should slightly balance supply and demand.
Analysts at Citigroup, Goldman Sachs and BNP Paribas forecast further yuan growth in 2026. Macro Hive experts expect the rate to strengthen even to 6.40.