A Chinese bank worker prepares to count a stack of US dollars together with stacks of 100 Chinese yuan notes at a bank in Hefei, east China’s Anhui province on March 9, 2010.
STR/AFP | Getty Images
Chinese authorities are contending with a weakening yuan as global investment banks forecast the currency to hit record lows, in anticipation of U.S. president-elect Donald Trump following through with his tariff threats.
Major investment banks and research firms project offshore yuan to weaken to an average 7.51 per dollar through the end of 2025, according to CNBC’s calculation of forecasts from 13 institutions.
That would mark the currency’s weakest level on record, according to LSEG data going back to 2004.
Chinese currency forecasts against U.S. dollar
| End-2024 | End-2025 | |
|---|---|---|
| UBS | 7.30 | 7.60 |
| BNP Paribas | 7.70 | |
| Barclays | 7.25 | 7.50 |
| J.P. Morgan | 7.30 | 7.50 |
| BMI | 7.30 | 7.60 |
| Societe Generale | 7.10 | |
| Morgan Stanley | 7.30 | 7.60 |
| Goldman Sachs | 7.25 | 7.50 |
| Macquarie Group | 7.25 | 7.38 |
| Capital Economics | 7.30 | 8.00 |
| Nomura | 7.50* | |
| ING | 7.20 | 7.30 |
| Oxford Economics | 7.40 |
Source: Investment banks, research houses.
*Aug 2025 expiry
Trump on Monday said he would impose an additional 10% tariff on all Chinese goods coming into the U.S., according to a post on his social media platform Truth Social. Trump had already pledged 60% or higher tariffs on Chinese goods during his election campaign.
“U.S. tariffs would, other things equal, lead to an appreciation of the dollar … currencies of economies with close trade links to the U.S. would see the largest currency adjustments,” said Jonas Goltermann, deputy chief markets economist at Capital Economics.
The yuan would need to move to a level of 8.42 against the dollar to fully factor in 60% tariffs on all Chinese goods, according to the projection of Mitul Kotecha, Barclays’ head of FX & EM macro strategy of Asia.
The offshore yuan has lost over 2% since the U.S. presidential election on Nov. 5, and last traded at 7.2514 on Thursday.
The uncertainty is a lot higher this time than for Trump’s first term in office, given the size of the tariff threat, the magnitude of the trade imbalance.
Ju Wang
Head of Greater China FX & rates strategy at BNP Paribas
During the initial round of U.S. tariffs on Chinese goods under Trump’s first term as president in 2018, the yuan depreciated by about 5%, according to Reuters, and weakened another 1.5% the following year when trade tensions intensified.
China has maintained a tight control over the yuan’s value onshore by setting a daily price with the currency allowed to trade within a 2% band around that price. Offshore trading is more market-driven.
“The uncertainty is a lot higher this time” than during Trump’s first term in office, given the size of tariff threat and magnitude of trade imbalance between China and the U.S., said Ju Wang, head of Greater China FX & rates strategy at BNP Paribas.
“Any perceived lack of consistency in the new US administration’s policy statements would also add to the uncertainty,” Wang added, who expects the PBOC to…
Read More: Chinese yuan to hit record lows as U.S. tariff threat mounts, investment
