Market Highlight 30.01.2026

The U.S Department of the Treasury has said the renminbi is “significantly undervalued” and urged China to allow its currency to appreciate in a timely and orderly manner. The CNY gained 4,2% in 2025 - its first annual rise since 2021 in both onshore and offshore markets - supported by a weaker USD, renewed inflows into mainland equities, efforts to internationalise the CNY, and a more stable domestic exchange-rate regime. The International Monetary Fund (IMF) has recently linked China’s export boom and record trade surplus partly to the currency’s inflation-adjusted depreciation. A Goldman Sachs analysis published in December estimated the CNY to be undervalued by as much as 25%. The CNY is expected to strengthen to the 6,84 - 6,91 range versus the USD by end-2026.

The USD edged lower against the JPY and the EUR yesterday, as markets remained uneasy about U.S policy even after the FED kept rates unchanged in January. President Donald Trump said last night the U.S should cut interest rates significantly now and should have the lowest rates in the world. Still, while U.S policy uncertainty remains elevated - particularly ahead of the appointment of a new FED Chair in May - forecasts suggest the FED’s rate-cut cycle may have run its course, as the U.S labour market is gradually improving while inflation shows signs of re-accelerating. A growing number of projections point to the FED’s next policy move potentially being a rate hike, likely in Q4/2026.

The USD/VND interbank exchange rate fell by more than VND 60 yesterday, closing at 26.000. The downtrend has extended since the start of the week with no clear signs of stabilisation. The next target may be a test of the 25.800 - 25.900 zone.

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