Goldman Sachs Targets Yuan at 6.40, Models Point to Possible 6.00

Goldman Sachs projects the Chinese yuan will rise to 6.40 against the dollar in the next twelve months, compared with approximately 6.69 currently. The bank’s chief currency strategist believes forward markets have yet to price in that scenario.

Kamakshya Trivedi, who leads Goldman’s foreign-exchange, rates and emerging-markets strategy research, estimates the yuan is undervalued by 20% to 25%, describing that range as conservative.

Why Does Goldman Keep Raising Its Yuan Call?

The bank has revised its yuan forecast upward multiple times. In May it raised its 12-month projection to 6.50 per dollar. The latest 6.40 target represents a further strengthening.

“At every stage as we’ve shifted the forecast stronger, I think I’ve been surprised by the extent to which consensus and forward markets still haven’t caught up to that,” Trivedi said.

Trivedi attributed the forecast to China’s trade surplus, which stood at $805.5 billion during the first eight months of 2026. The yuan is already at a four-year peak versus the dollar.

One dollar currently buys 6.6922 yuan, a decline of 4.30% since early 2026. Against the euro, the yuan has appreciated by more than 8% this year.

Bloomberg classifies the yuan as one of the few currencies that can continue strengthening even as the dollar rebounds amid geopolitical uncertainty and inflation. Earlier in March, analysts predicted Beijing would allow a gradual appreciation toward 6.70. The yuan is now trading near that level.

According to Trivedi, Chinese policymakers may be becoming more at ease with additional yuan strength, in part because they value stable trade relationships.

What Could a Stronger Yuan Pay Investors?

Trivedi argues that a gradual appreciation boosts the appeal of returns on Chinese assets. Currency gains benefit foreign investors because the yuan they hold can purchase more dollars.

“Modest, gradual but sustained appreciation I think serves that purpose of internationalization as well…It makes the return picture in Chinese assets a bit more attractive,” the executive added.

To illustrate, $10,000 converted at 6.69 yuan per dollar yields 66,900 yuan. If the yuan reaches Goldman’s 6.40 target, that same amount would convert back to approximately $10,450, representing a gain of about 4.5%.

Goldman’s fair-value models additionally indicate a potential move to 6 yuan per dollar, a level last recorded in early 2014. At 6.00, the same $10,000 position would appreciate by roughly 11.5%, assuming the yuan value remains unchanged.

Trivedi connects a stronger yuan to China’s ambition of establishing a global reserve currency. Hong Kong is aiding that effort through a gold market denominated in yuan. The city intends to expand its Shanghai-linked vault capacity from 150 tonnes to more than 2,000 tonnes over three years.

Charles Chang from S&P Global Ratings noted that gold provides yuan holders with an additional avenue for using the currency. Still, analysts do not foresee the dollar losing its dominant role in global transactions in the near term.

Trivedi anticipates a gradual yet sustained rise for the yuan. The key question now is whether forward markets will converge on Goldman’s 6.40 forecast.