Morgan Stanley: It is expected that by the end of 2026, the appreciation of the RMB against the US dollar will be relatively moderate, possibly reaching 7.05.

This morning, the MSCI China index rose, expanding to 20% from its April low. Judging from the current situation, the bullish trend in China's stock market is indeed strengthening. Morgan Stanley said that investors are particularly concerned about new technologies and new business models in the Chinese market, especially new consumer themes and artificial intelligence/technology related themes. Investors have also given more recognition to China's ability to compete in global technology, such as breakthroughs in artificial intelligence and progress in electric vehicles, batteries, humanoid robots, etc., and have begun to rethink the strategy of investing in both Chinese and American markets in a multi-polar world. On the exchange rate, Morgan Stanley has changed its view of the RMB against the US dollar from depreciation to appreciation. The shift reflects its expectation of a weaker dollar, with the dollar index expected to fall to 89 by the end of 2026. Meanwhile, the euro is also expected to appreciate more than 10% against the dollar. However, Morgan Stanley expects the yuan to appreciate relatively modestly against the dollar by the end of 2026, possibly reaching 7.05. (Jin Ten)