2025 USD to CNY Exchange Rate Trend Analysis: Multi-Factor Projection and Investment Strategies

The Strength of the US Dollar Determines RMB Fluctuations

The long-term trend of the USD/CNY exchange rate essentially reflects the relative policy orientations and growth expectations of the two economies. From a technical perspective, USD/CNY has been oscillating within the 7.23-7.26 range, lacking clear breakout momentum, but the underlying logic is quietly changing.

Analysis of Macro Drivers

The resilience of the US economy is under pressure. March employment data fell short of expectations, directly boosting market expectations for further Fed rate cuts. What does a rate cut mean? Reduced attractiveness of the dollar, lower US Treasury yields, and a relative depreciation of dollar assets. On the Chinese side, the People’s Bank of China’s exchange rate policies and market guidance continue to provide long-term support for the RMB.

This policy divergence may continue into 2025 — as the Fed’s easing cycle deepens gradually, the PBOC will need to balance between stabilizing growth and preventing risks. As a result, the upward momentum of the USD against the RMB may be limited.

Historical Cycles Highlight Current Opportunities and Risks

Since the collapse of the Bretton Woods system in the 1970s, the US dollar has experienced eight complete cycles. Each cycle reflects the results of major powers’ economic and policy battles — from Nixon’s “gold standard” failure leading to dollar depreciation, to Volcker’s aggressive rate hikes pushing the dollar to a peak of 120; from the long bear market after the internet bubble to the extreme depreciation during the 2008 financial crisis.

These historical episodes tell us: The bull-bear cycles of the dollar are usually synchronized with the Fed’s policy shifts. Currently, with the Fed shifting from aggressive rate hikes to easing expectations, this turning point typically signals a period of relative dollar weakness.

Multi-Currency Performance Expectations in the Context of USD Depreciation

Euro’s Counterattack Mechanism

EUR/USD has risen to 1.0835, driven by improved expectations for ECB policies and the dollar’s relative depreciation. If the Fed indeed begins a rate cut cycle and the Eurozone’s economy continues to recover, the euro is likely to strengthen further, possibly challenging the psychological threshold of 1.09 or higher.

Pound’s Relative Resilience

The Bank of England’s rate cut pace is expected to be slower than the Fed’s, providing support for the pound. Amid deepening economic divergence between the UK and US, GBP/USD is expected to oscillate upward within the 1.25-1.35 range, with potential to break above 1.40 if policy paths further diverge.

Yen’s Recovery Signal

Japan’s wage growth has reached a 32-year high (3.1% YoY), reflecting genuine strength in the labor market. This suggests the Bank of Japan may accelerate rate hikes to address potential inflation pressures. USD/JPY is expected to face downward pressure; technically, a break below 146.90 would further test lower levels.

Australian Dollar’s Commodity Cycle Support

Australia’s Q4 GDP growth exceeded expectations, with a strong trade surplus, and the cautious stance of the central bank hints at limited room for rate cuts. The RBA’s relatively hawkish stance supports a stronger AUD, which is expected to benefit from dollar depreciation, pushing AUD/USD higher.

USD to RMB: Short-term Volatility, Long-term Weakening

Considering the Fed’s policy trajectory and China’s economic characteristics, USD/RMB may exhibit the following features in 2025:

Short-term (Q1-Q2): Technical Range Maintenance

• USD/RMB repeatedly tests support and resistance between 7.23-7.26
• If US economic data exceeds expectations (e.g., non-farm payrolls > 250,000), the dollar may temporarily rebound toward 7.30
• If the Fed clearly initiates a rate cut cycle, RMB may break in the opposite direction, testing below 7.20

Mid-to-long-term (Post-Q3): Mild Depreciation Trend

• Deepening Fed rate cuts reduce US Treasury yield advantage, weakening dollar upside momentum
• Accelerating de-dollarization globally (e.g., expansion of BRICS countries’ local currency settlements) diminishes dollar reserve currency premium
• USD/RMB may gradually move below 7.15, with potential support from central bank interventions

Investment Strategies for 2025 Exchange Rate Fluctuations

Aggressive Investors

Engage in high-low trading within the 7.20-7.30 range, utilizing technical signals (MACD divergence, Fibonacci retracement) to catch reversal opportunities. When US data exceeds expectations or geopolitical tensions escalate, the dollar may rally short-term; when Fed easing signals emerge, opportunities to short the dollar and go long RMB will arise.

Conservative Investors

Monitor the actual implementation of Fed policies, waiting for market confirmation of rate cuts. Avoid rushing into positions; instead, seek high-probability, certainty opportunities amid exchange rate volatility. Pay attention to central bank guidance on exchange rates and the real performance of US economic data.

Long-term Allocation Approach

Gradually reduce outright bullish bets on the dollar, reallocating into reasonably valued non-US currencies (e.g., yen, AUD), or increasing holdings linked to commodities (gold, copper). In a declining dollar cycle and a globally ample liquidity environment, these assets are expected to outperform relatively.

Winning Strategies for the 2025 Forex Market

The USD trading environment has entered a new era of “data-driven + event-sensitive” dynamics. Federal Reserve meetings, non-farm payrolls, GDP data, and sudden geopolitical risks will be key short-term exchange rate drivers. Only by maintaining sufficient flexibility and strict risk discipline can investors seize excess returns amid currency fluctuations.

For RMB investors, the moderate depreciation trend of USD against RMB provides a window for allocating into non-US assets and hedging against single currency risks. Against the backdrop of rising global economic uncertainty, diversified multi-currency and multi-asset allocations have become standard for rational portfolios.