The RMB to USD spot exchange rate has reached a 42-month high.

On August 10, the onshore yuan's exchange rate against the US dollar peaked at 6.7439 during trading, marking a new high not seen in over three years since February 6, 2023. ICBC Asia believes that in the outlook for the yuan's performance in the second half of the year, the exchange rate is likely to continue its upward trend with fluctuations. The main influencing factors include: first, the expectation of resilient export growth in the second half of the year, with attention to the impacts of geopolitical risks and tariff policies on the structure, volume, and pricing of export products and regions; second, international capital increasing its allocation to yuan-denominated assets, resulting in net capital inflows that support a stronger yuan; third, the opportunistic adjustments of the dollar's midpoint exchange rate against the yuan. The chief economist team at China Minsheng Bank points out that this year, the main factors supporting the yuan's strength have been robust export performance. Currently, with the continued optimization of the trade structure, high growth in exports is expected to persist, and trade surpluses are anticipated to remain elevated. Overall, China's economy demonstrates strong resilience in the context of a complex and changing external environment and an internal transition between old and new development dynamics, while the foreign exchange market operates steadily, laying a solid foundation for the yuan to remain stable at a reasonable and balanced level. The yuan's exchange rate is expected to maintain a stable and bidirectional fluctuation pattern around 6.75 in August.