After onshore RMB broke 7, the forward exchange rate has been pushed up to 6.86, and the hedging cost for exporters has fallen to 1.7%—the lowest level since August 2022.

The underlying logic is actually quite interesting. The dual effects of the Fed's rate cut expectations and swap discounting have caused a surge in rolling three-month forward settlement volume for customer accounts until November 2025, which has skyrocketed to $109.8 billion, reaching a new high since June 2023.

The response from banks is particularly crucial. Faced with a surge in clients' derivative exposures, they are forced to sell dollars in the spot market to hedge and unwind positions. This operation creates an interesting feedback loop: dollar selling further strengthens the RMB's appreciation momentum. The forward market's buying drives the spot market's trend, forming a self-reinforcing positive feedback cycle. Coupled with the seasonal settlement demand typically seen before the Spring Festival, this trend could be further reinforced.