Goldman Sachs has revised its Chinese yuan forecasts upward, arguing the currency remains undervalued despite months of steady appreciation, as fresh trade data released Saturday showed China’s exports surging well beyond expectations in April.
Record Trade Performance Fuels Optimism
The investment bank now expects the yuan to strengthen further against the U.S. dollar over the coming months, driven by a widening trade surplus and robust global demand for Chinese manufactured goods. The revision builds on Goldman’s long-standing conviction that the yuan is deeply undervalued — the bank’s models have estimated the currency sits roughly 25% below fair value on a trade-weighted basis.
Data from China’s General Administration of Customs released on Saturday showed the country’s foreign trade grew 14.2% year-on-year in April to 4.38 trillion yuan. Exports, measured in U.S. dollar terms, jumped 14.1% compared with a year earlier, far exceeding the 7.9% increase economists had projected and accelerating sharply from March’s 2.5% growth, according to CNBC. China’s trade surplus swelled to $84.8 billion in April, up from $51.13 billion in March.
Yuan’s Steady Climb
The yuan has appreciated steadily throughout 2026, moving from around 6.97 per dollar in January to approximately 6.80 by early May. Goldman Sachs earlier this year raised its 12-month forecast to 6.7 per dollar, a call that was roughly 3.5% stronger than the trading level at the time, according to Reuters. Bank of America and Morgan Stanley have also lifted their yuan projections.
Beijing, however, has signaled caution about the pace of gains. Analysts note that authorities have a toolkit of measures — including semi-official yuan selling and adjustments to banking reserve ratios — to temper appreciation if it moves too quickly.
Export Engine Drives Broader Outlook
The April trade figures reflected a rush by international buyers to secure Chinese components amid concerns that the conflict in Iran could push global input costs higher, according to The New York Times. Factory data showed new export orders reaching a two-year high. For the first four months of 2026, China’s total trade reached 16.23 trillion yuan, up 14.9% from a year earlier.
Goldman Sachs Research expects China’s current account surplus to rise to 4.2% of GDP in 2026, well above the consensus estimate of 2.5%, providing sustained upward pressure on the currency. As one ING economist noted in comments reported by the Associated Press, “overall external demand will continue to be a strong driver of growth this year”.
