---
title: "Yuan seen strengthening to 6.8 as China resilience offsets seasonal weakness"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/281816259.md"
description: "Yuan is expected to strengthen to around 6.8 per USD in Q2, defying typical seasonal weakness due to strong trade performance and a widening surplus. Analysts from TD Securities and Credit Agricole CIB highlight China's large FX reserves and limited exposure to energy shocks as key supports. The yuan has already gained approximately 3% in Q1 against peers, and is increasingly viewed as a regional safe-haven despite geopolitical volatility, particularly from the Iran conflict. This outlook suggests a shift in the yuan's behavior, benefiting from strong fundamentals and external balances."
datetime: "2026-04-07T01:48:05.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/281816259.md)
  - [en](https://longbridge.com/en/news/281816259.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/281816259.md)
---

# Yuan seen strengthening to 6.8 as China resilience offsets seasonal weakness

Yuan seen strengthening despite seasonal headwinds as fundamentals and flows dominate.

Earlier:

-   PBOC sets USD/ CNY reference rate for today at 6.8854, the strongest, for CNY, in nearly 3 years.

Summary:

-   Strategists see yuan strengthening to ~6.8/USD in Q2
-   Defies typical seasonal weakness from tourism and dividends
-   Currency up ~3% in Q1 vs peers
-   Strong trade performance and widening surplus supportive
-   Large FX reserves and undervaluation key pillars
-   Limited exposure to energy shock vs peers
-   Iran conflict volatility not derailing yuan strength
-   Increasingly viewed as regional safe-haven

China’s currency is increasingly being seen as a relative outperformer in Asia, with strategists expecting the yuan to defy its usual seasonal weakness and strengthen further in the coming months.

Analysts at TD Securities and Credit Agricole CIB forecast the yuan to appreciate toward 6.8 per dollar in the second quarter, supported by improving domestic fundamentals and resilience to external shocks, including the ongoing Iran conflict.

The call challenges a well-established seasonal pattern. Historically, the yuan tends to weaken in the second quarter as outbound tourism picks up and dividend-related foreign exchange demand rises. However, strategists argue that this year’s backdrop is materially different, with stronger underlying flows offsetting those pressures.

The currency has already demonstrated notable strength, gaining roughly 3% in the first quarter on a relative basis against its peers. That performance reflects a combination of solid trade dynamics and a widening current account surplus, as exports remain firm despite global uncertainty.

Strategists including Eddie Cheung at Credit Agricole, Wee Khoon Chong at BNY, and Alex Loo at TD Securities point to several structural supports. These include China’s large foreign exchange reserves, continued accumulation of external surpluses, and relatively limited exposure to energy price shocks compared with other economies.

Crucially, the yuan is also seen as undervalued on multiple metrics, providing additional room for appreciation as global investors reassess positioning across emerging market currencies.

The broader geopolitical environment is also shaping flows. While the Iran conflict has injected volatility into global markets, particularly through energy channels, China’s position as a major importer with significant reserves and controlled capital flows has helped insulate its currency. In this context, the yuan is increasingly being viewed as a relative safe harbour within the region.

Taken together, the outlook suggests a shift in the yuan’s traditional behaviour. Rather than weakening on seasonal factors, the currency may instead benefit from a combination of strong external balances, policy stability, and relative insulation from global shocks, supporting further gains through the second quarter.

### Related Stocks

- [03420.HK](https://longbridge.com/en/quote/03420.HK.md)
- [83192.HK](https://longbridge.com/en/quote/83192.HK.md)
- [03192.HK](https://longbridge.com/en/quote/03192.HK.md)
- [FXC.UK](https://longbridge.com/en/quote/FXC.UK.md)

## Related News & Research

- [US MILITARY ANNOUNCES THEY BOARDING IRANIAN-FLAGGED OIL TANKER.](https://longbridge.com/en/news/287100354.md)
- [IRAN'S FOREIGN MINISTRY SPOKESPERSON SAYS IRAN READY TO DEVELOP PROTOCOLS FOR SAFE SHIPPING TRAFFIC IN COOPERATION WITH OTHER COASTAL STATES](https://longbridge.com/en/news/287101035.md)
- [10 little cities that are becoming the next big thing in the US, according to data](https://longbridge.com/en/news/286652453.md)
- [The Most Consistent Seasonal Trades Across Commodities—Backed by 15 Years of Data](https://longbridge.com/en/news/286648926.md)
- [The oil shock has mushroomed into a larger bond crisis](https://longbridge.com/en/news/286925509.md)