FACTBOX-Global investment houses eye Chinese yuan rise past key 7 mark in 2026

SHANGHAI, Nov 11 (Reuters) - Some investment houses expect the Chinese yuan to strengthen beyond the psychologically critical 7-yuan-per-dollar mark for the first time since 2023 next year, underpinned by narrowing yield differentials with the United States and prospects for easing trade tensions.

China's yuan CNY=CFXS has gained about 2.5% against the dollar so far this year to 7.1223 on Tuesday. A breach of the 7-yuan mark would mean a rise of another 1.75%.

Here is a summary of some forecasts for the Chinese currency:

KEY QUOTES:

GOLDMAN SACHS

"Looking ahead, CNY appreciation against the USD is likely to remain gradual and choppy, with the USD leg being the key driver. A faster appreciation would require a clearer catalyst, such as repatriation flows from exporters toward year-end, as seen in September."

ING

"In 2025, the People's Bank of China demonstrated not only the willingness but also the capability to maintain currency stability amid heavy market pressure. There is little to suggest that a change in position is imminent, as currency stability plays into several main objectives.

"Barring a major change in priorities, the PBOC will continue to keep USD/CNY relatively stable, and the CNY will remain a low volatility currency versus the USD. We expect that USD/CNY may trade in a range of 6.90-7.30 next year."

SOOCHOW SECURITIES

"With the U.S. dollar index expected to maintain structural weakness through 2026, current account surplus and net inflows through securities investment may push the yuan to the stronger side of 7 per dollar.

"Assuming annualised volatility remains within 3.0-4.0% throughout the year, the yuan is projected to appreciate toward 6.70-6.80 per dollar by the end of 2026."

LGT

"The positive outcome from the Trump-Xi summit, combined with the PBOC's willingness to lower the USD/CNY fix and increased onshore FX conversion, points to scope for CNH appreciation.

"However, major appreciation (for dollar/yuan pair) below 7 is likely constrained by ongoing cyclical and structural challenges. The PBOC could follow a Federal Reserve rate cut as economic headwinds intensify including sluggish consumption and investment and renewed downward pressure on property prices."