RMB Exchange Rate: U.S. April PCE Price Index Hits a Three-Year High

[Market Recap] On the previous trading day, the USD/CNY pair rose initially before declining. The onshore renminbi closed at 6.7800 against the U.S. dollar at 16:30, up 17 basis points from the prior session, and ended the night session at 6.7753. The central parity rate for CNY/USD was set at 6.8240, 51 basis points stronger than the previous day. At the New York close, the dollar index fell 0.22% to 99.01.

[Core Logic] The U.S. April PCE price index reached a three-year high, largely in line with market expectations. However, the first-quarter U.S. GDP was revised down to 1.6%, below the expected 2%, while consumption and employment data broadly weakened, causing Treasury yields to decline and putting downward pressure on the dollar index. The dollar index remains in a consolidation range overall; a clear directional breakout in the near term will likely require fresh catalysts. In the absence of significant new positive or negative developments, price action is likely to remain range-bound, consolidating over time to build momentum. The correlation between the RMB exchange rate and the dollar index has recently strengthened. Upcoming domestic PMI data will be key to assessing whether the recent economic softness persists.

[Strategy Recommendation] In the short term, export-oriented firms are advised to opportunistically lock in forward foreign exchange settlements in batches near 6.82 to hedge against potential losses from RMB appreciation. Importers, meanwhile, may consider implementing a rolling spot purchase strategy around the 6.76 level.

[Key Information]

1) Iranian media reported that the text of the Iran-U.S. 'memorandum of understanding' has not yet been finalized, and Iran has not agreed to any such memorandum. Iranian media: Iran fired warning shots at 'non-compliant vessels' attempting to pass through the Strait of Hormuz.

2) The U.S. first-quarter GDP was revised down to 1.6%, below the expected 2%, as consumption weakened and investment stalled. Energy-driven inflation intensified, with the U.S. April PCE price index rising 3.8% year-over-year—the highest in three years—and the core index accelerating to a 3.3% year-over-year increase.

3) U.S. durable goods orders surged 7.9% month-over-month in April, but core capital goods data unexpectedly softened.

4) The Federal Reserve's 'third-in-command' stated that U.S. inflation remains elevated in the near term but long-term expectations are stable, and current interest rate policy is appropriately positioned.

Author: Pan Xiang, NanHua Research Institute, Z0021448

Report date: May 29, 2026

Important Disclaimer: The content and opinions in this article are for learning and reference purposes only and do not constitute any investment advice. The market carries risks, and investments should be made with caution.

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