Commerzbank forecasts the Chinese yuan (CNY) will rise modestly against the US dollar (USD), with USD/CNY at 6.90 by June 2026 and 6.70 by late 2027. It expects EUR/CNY to remain broadly stable, while the CNY stays undervalued against most other currencies.
The bank links this to strong exports, a large current account surplus and state-directed bank flows that support China’s managed exchange rate approach. It also notes that, in periods of major global economic or geopolitical disruption, the CNY often moves into a stable phase against the USD.
Yuan Trading Pattern During Disruption
Since early April last year, the yuan had been appreciating against the USD almost continuously. After the start of the Third Gulf War, USD/CNY shifted to sideways trading.
The analysis says a gradual CNY rise versus the USD would align with China’s aim to expand global use of the currency. It adds that a small lift against the USD could still mean the CNY weakens versus many other currencies, including the euro.
The article states it was produced using an AI tool and reviewed by an editor.
Our view remains that the Chinese yuan is set for a gradual, managed appreciation against the US dollar, with the USD/CNY pair likely heading towards 6.90 by June. This outlook is reinforced by China’s strong export data released for the first quarter of 2026, which showed a 4.5% rise year-over-year, bolstering the country’s massive current account surplus. For traders, this controlled descent suggests selling out-of-the-money call options on USD/CNY could be a prudent way to gain from the pair’s expected ceiling.
Implications For Options Positioning
We saw a clear precedent for stability during turmoil last year; after strengthening through early 2025, the yuan entered a sideways phase against the dollar with the start of the Third Gulf War. As geopolitical risks remain elevated, we expect the People’s Bank of China to continue favoring stability, intervening to prevent any sharp or sudden moves. This makes range-bound strategies, such as selling strangles on USD/CNY, an attractive proposition for the coming weeks.
The slow appreciation against the dollar is also a strategic move to promote the yuan’s international use, making CNY-denominated assets more appealing to global investors. However, this slight strengthening against the dollar will likely translate into a depreciation against a basket of other currencies, especially the euro. Data from March 2026 confirmed that inflation in the Eurozone remains persistently higher than in China, supporting a stronger EUR.
This divergence means the yuan will likely stay significantly undervalued, which is beneficial for China’s export-driven economy. For derivative traders, this points to a stable to slightly rising EUR/CNY cross rate. Given the historically low volatility in this pair over the past year, selling options to collect premium appears to be a consistent strategy.
