--- title: "After the appreciation of the RMB, can we still invest in USD financial products?" type: "News" locale: "en" url: "https://longbridge.com/en/news/283117276.md" description: "The appreciation of the RMB puts pressure on dollar-denominated financial products, causing investors to face foreign exchange losses. In April 2026, the RMB/USD exchange rate broke through 6.82, leading to many investors' interest earnings being swallowed by exchange losses, and even principal losses. The Federal Reserve's interest rate cuts have triggered a decline in dollar interest rates, with current dollar fixed deposit rates dropping to 2.5%-2.8%. Analysts point out that the strengthening of the RMB benefits from the easing of the situation in the Middle East and the recovery of the domestic economy, and it is expected that the RMB will fluctuate around 6.9-7.0. The losses in dollar-denominated financial products are mainly due to exchange rate fluctuations exceeding interest spread earnings" datetime: "2026-04-17T08:59:13.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/283117276.md) - [en](https://longbridge.com/en/news/283117276.md) - [zh-HK](https://longbridge.com/zh-HK/news/283117276.md) --- # After the appreciation of the RMB, can we still invest in USD financial products? Once popular due to high interest rates, dollar deposits and wealth management products are now facing dual pressures from currency appreciation and declining interest rates, breaking the previous "guaranteed profit" investment logic. In mid-April 2026, both onshore and offshore RMB against the US dollar broke the 6.82 mark, appreciating over 7% from around 7.35 in the fourth quarter of 2025. Many investors' interest income has been swallowed by exchange losses, and some even face principal losses. One investor exchanged 80,000 USD at an exchange rate of 7.3 at the end of 2024, when the one-year fixed deposit rate was 4%. Upon maturity, they rolled over to a six-month rate of 2.5%. Now, as the product is about to mature, based on the current exchange rate of 6.81, even with all interest included, they still incur a loss of over ten thousand yuan when converting back to RMB. Many investors who exchanged currency at high points are facing similar situations, where high interest rates cannot offset exchange rate fluctuations. This situation is primarily triggered by the Federal Reserve's continuous interest rate cuts. In September 2024, the Federal Reserve began cutting rates, with a cumulative reduction of over 175 basis points by 2025, bringing the interest rate range down to 3.5%—3.75%, directly driving down domestic dollar interest rates. Currently, many banks offer dollar fixed deposit rates of only 2.5%, 2.8%, and 2.8% for six months, one year, and two years, respectively; as of the end of March 2026, the average annualized yield for dollar cash management wealth management products has dropped to 3.6%, significantly down from the previous level of over 4%. Wang Qing, chief macro analyst at Dongfang Jincheng, stated that the current strength of the RMB is partly due to the easing situation in the Middle East and the weakening of the dollar, and partly thanks to high export growth, as well as a recovery in consumption and investment in the domestic market during the first quarter, providing strong support for the economic fundamentals. Although there are still uncertainties in the Middle East and high volatility in the foreign exchange market, the RMB is expected to maintain a stable and slightly strong trend under the recovery of foreign trade and the implementation of domestic demand policies. Wang Qing also pointed out that regulatory authorities have lowered the foreign exchange risk reserve ratio and raised the offshore loan leverage ratio for some banks, which can effectively guide expectations and prevent excessive exchange rate adjustments. It is expected that this year, the RMB against the US dollar will fluctuate around the central level of 6.9—7.0 in both directions. The key to the losses in dollar wealth management lies in the fact that exchange rate fluctuations far exceed interest rate differential gains. Investors who exchanged currency above 7.18 in early 2024-2025 are facing a depreciation of over 4% of the dollar against the RMB at the current exchange rate of around 6.86. Even with an annualized rate of 4.5%, the principal and interest of 100,000 USD would amount to 104,500 USD after one year, but the RMB amount after conversion is lower than the initial exchange cost, further shrinking actual returns when considering bank exchange rate spreads and other hidden costs. The market environment has fundamentally changed: the dollar's interest rate advantage continues to narrow, and the expectation of a medium-term strengthening of the RMB is clear. The risk of simply chasing interest rate differentials by allocating dollar assets has significantly increased. The notion that "not converting means not losing" is unreasonable, as it easily overlooks real risks and can occupy funds, causing the loss of other investment opportunities. For investors who already hold dollar assets, if there is a practical need for foreign exchange for studying abroad or overseas consumption, they can continue to hold them as payment reserves; if there is no practical need, they can gradually convert to RMB stable assets at appropriate exchange rates or set stop-loss lines to control volatility risks. For investors without a pressing need for dollars, blindly entering the market at this time is equivalent to gambling on exchange rates, with risks clearly outweighing potential returns ### Related Stocks - [03137.HK](https://longbridge.com/en/quote/03137.HK.md) - [XBJF.DE](https://longbridge.com/en/quote/XBJF.DE.md) - [83192.HK](https://longbridge.com/en/quote/83192.HK.md) - [UDN.US](https://longbridge.com/en/quote/UDN.US.md) - [03161.HK](https://longbridge.com/en/quote/03161.HK.md) - [09176.HK](https://longbridge.com/en/quote/09176.HK.md) - [09480.HK](https://longbridge.com/en/quote/09480.HK.md) - [03420.HK](https://longbridge.com/en/quote/03420.HK.md) - [03176.HK](https://longbridge.com/en/quote/03176.HK.md) - [03192.HK](https://longbridge.com/en/quote/03192.HK.md) - [USDU.US](https://longbridge.com/en/quote/USDU.US.md) - [83161.HK](https://longbridge.com/en/quote/83161.HK.md) - [UUP.US](https://longbridge.com/en/quote/UUP.US.md) - [03480.HK](https://longbridge.com/en/quote/03480.HK.md) ## Related News & Research - [METALS-Copper falls to over 1-week low as strong dollar, higher bond yields weigh](https://longbridge.com/en/news/287000664.md) - [USD / CAD - Canadian Dollar trading with a negative bias](https://longbridge.com/en/news/287146943.md) - [Cotton Back to Mixed Trade at Wednesday’s Midday](https://longbridge.com/en/news/287108228.md) - [Indonesia central bank delivers hefty interest rate rise as it looks to stem battered rupiah's fall](https://longbridge.com/en/news/287025507.md) - [Cotton Closes Mostly Lower on Wednesday](https://longbridge.com/en/news/287132464.md)