The RMB exchange rate strongly recovers the "7" threshold: offshore and onshore prices hit record highs simultaneously

On Christmas Day, the RMB against the US dollar experienced a key breakthrough. According to Sina Finance Market News, the offshore RMB (CNH) to USD exchange rate once broke through the 7.0 psychological barrier, marking the first time since 2024.

On the same day, the onshore RMB (CNY) to USD exchange rate also rose to around 7.01, hitting a new high since September 2024. As an important benchmark for the exchange rate, the RMB central parity rate was adjusted upward by 79 points to 7.0392, with the appreciation reaching the highest level since August 27, 2025.

This strong appreciation of the RMB is a concentrated reflection of the ongoing strengthening trend over the past month. Analysts generally believe that this round of appreciation is driven by both external dollar weakness and internal fundamentals.

From the external environment, the recent sharp decline in the US dollar index (DXY) has also created favorable conditions for RMB appreciation;

Internally, China's economic resilience and attractiveness provide solid support, coupled with the seasonal release of corporate foreign exchange settlement demands near year-end, further boosting the RMB exchange rate.

Regarding future trends, market analysts generally expect the RMB to appreciate modestly by 2026, but to achieve a significant breakthrough and stabilize above the 7.0 threshold, further resonance of internal and external positive factors may be needed. However, analysts also warn that the recent rapid appreciation of the exchange rate means that the momentum for reverse fluctuations is accumulating, and future volatility in the foreign exchange market may increase.

Additionally, according to data from CME's "FedWatch" tool, the market expects an 84.5% probability that the Federal Reserve will keep interest rates unchanged in January next year. This hawkish expectation may continue to exert pressure on the US dollar, thereby externally supporting the RMB exchange rate.

Overall, the RMB breaking through the 7.0 mark is the result of a combination of external space created by dollar weakness and internal momentum provided by China's economic resilience and seasonal foreign exchange settlement demands.

However, the rapid appreciation of the exchange rate also accumulates some reverse fluctuation momentum, which could lead to significantly increased volatility in the future foreign exchange market. Therefore, while being optimistic about the long-term resilience, market participants should also prepare for normal bidirectional fluctuations.