Goldman Sachs revises its yuan targets higher, citing structural undervaluation and China’s record external surplus.
Goldman Sachs raised its forecasts for the Chinese yuan, projecting it will strengthen to 6.50 per dollar in a year, up from prior targets. The bank estimates the currency is more than 20% undervalued against the dollar, driven by fundamental factors rather than short-term events.
The yuan is currently trading near 6.80, its strongest level since early 2023, supported by improving US-China relations and a weaker dollar. Goldman cited China’s external surplus, approaching unprecedented levels as a share of global GDP, as evidence of deep export competitiveness and structural undervaluation.
Recent strength in the People’s Bank of China’s daily fixings and rising exporter conversion ratios reinforce the outlook for gradual appreciation. The bank described the case for yuan gains as longer-lasting, with a baseline scenario of sustained strength.