USD/CNH seen higher at 7.25 over the next three months – Goldman Sachs
|Analysts at Goldman Sachs predict Yuan to fall further below 7.00 against the US dollar over the three-months, as US-China tensions are not seen subsiding soon.
Key quotes
“USD/yuan to 7.25 over the three months vs. prior forecast of 7.15.
Out 6 months see some recovery to 7.15 vs. prior 7.05.
12 months forecast now seen at 7.00 vs. 6.90 previously.
Uncertainty over U.S. policy toward China.
Disputes cover a range of issues that are unlikely to be resolved soon.
PBOC showing some tolerance for gradual currency depreciation.
We do not expect recent bilateral tensions to escalate to 2019 levels, with spill overs to markets well beyond" non-Japan Asia.”
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