CNY surprise
The Chinese Renminbi holds claim to one of the more surprising currency stories to have unfolded in 2025. Cast your mind back to the start of last year and you’ll recall two major themes in markets. Firstly, the risk of cooling global economic activity and an emerging threat from the White House to disturb the global terms of trade. Those two themes continued to mature as the year progressed and the latter manifested into the Trump administration’s tariff agenda. China had at least expected to be one of the biggest losers from that agenda.
Those themes left analysts publishing some of the most pessimistic forecasts for CNY to date. Ultimately, looking back on 2025 now, something very different manifested amongst CNY crosses, particularly USDCNY. Ahead of Trump’s liberation day in April, the focal point of the initial tariff agenda, USDCNY had been appreciating towards multi-year highs and established a range around 7.20-7.35. Most forecasts saw the pair trending higher throughout the year. Ultimately USDCNY broke below 7.00 on the penultimate trading day of 2025, around the level it remains today.
What wrong footed analysts then? Well, ultimately tariffs were thought to undermine China’s ability to export and ultimately therefore its current account surplus which itself is a source of support for the Chinese currency. We know now that didn’t happen and Chinese exports actually grew in value through 2025 thanks to continued strong exports to its traditional trading partners as well as developing more peripheral routes including to the EU. With EURUSD threatening parity at the start of 2025, many also hadn’t predicted quite such a dramatic fall in USD. Therefore, whilst CNY appreciated versus the US Dollar, against a broader basket of goods the story for the Renminbi is more mixed.
Discussion and Analysis by Charles Porter
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