6.90！

Thunderbolt! Today, the offshore RMB to USD exchange rate hit 6.9, reaching a new recent high.
At the end of November last year, the offshore RMB exchange rate was about 7.12 yuan per dollar, appreciating over 2100 basis points in three months.
In April 2025, Trump announced a "reciprocal tariff," with an exchange rate of approximately 7.428 RMB per USD.
Due to interest rate changes, there is currently a floating loss of 3%. Will it continue to shrink?
If you exchanged USD last April and deposited it in a bank in Hong Kong, you could earn a 4% annual interest rate. Due to interest rate changes, there is already a floating loss of 3%. Of course, the same applies to my U, and I personally have already lost the equivalent of 2 big Gs, while the Shanghai Composite Index has risen 35% during this period.
So many investors who exchanged USD are now kicking themselves.
Some people early on converted USD back to RMB and jumped into the stock/crypto markets.
Many are incredulous about this wave of currency appreciation: the economy feels so cold, shouldn’t it depreciate? Why go against the trend?
The main reason is: after the pandemic, developed countries like Europe and the US have been printing money extensively, causing severe inflation.
The US CPI reached an astonishing 9.1% in June 2022. Later, the Federal Reserve quickly raised interest rates but has not fully contained inflation.
Starting from September 2024, the US entered a rate-cutting cycle when inflation was above 3%.
Everyone who has visited the US in the past two years can deeply feel that US prices are unrecognizable compared to late 2019. Even the cost of manual services is outrageously high.
Meanwhile, we have experienced deflation, and the two countries’ prices have diverged in a K-shaped pattern.
But China’s manufacturing sector has recently undergone a stunning transformation, becoming more competitive.
If there had been no unprecedented global upheaval, and China-US relations returned to pre-2013 or pre-2012 levels, the RMB would likely be around 5 or 4.5 per USD.
Of course, if the two countries engage in fierce competition, we might see 8 or 8.5 RMB per USD.
The subsequent situation was basically like this: the tariff war in April was extremely intense, but by the end of October, an agreement was reached in just half a year.
However, this agreement only paused mutual tariffs for one year, expiring in November 2026.
So, there are still some uncertainties this year.
Trump is highly likely to visit in April, and there may be a return visit before the end of the year. It looks like the G2 relationship is stabilizing. If that’s the case, the RMB’s gradual and sustained appreciation could continue for a while—seeing 6.5 in 2 to 3 years is not impossible.
The main reasons for the appreciation are:
1. China’s economic transformation and upgrading are progressing smoothly, continuously enhancing competitiveness;
2. The exchange rate was previously undervalued;
3. The Federal Reserve will continue to cut rates, narrowing the US-China interest rate differential;
4. Hot money continues to flow into China’s capital markets;
5. Slight appreciation is beneficial for countering internal competition and balancing relationships with trade partners.
Of course, long-term investors don’t need to worry about exchange rates; time will give you the answer.