USD/CNY: Scope for declines ahead – MUFG
|USD/CNY close to recent highs but macro backdrop should reduce upside risks, economists at MUFG Bank report.
Stabilising growth will help reduce USD/CNY upside risks
We still see risks of broader US strength over the short-term and hence in that regard, upward pressure on USD/CNY may well persist. However, there are signs that the policy steps taken over the summer could be helping to bring about some stability and may in turn help improve sentiment that limits the upside USD/CNY pressure.
We currently forecast USD/CNY at 7.15 at year-end and then breaking below the 7.00 level in H1 next year.
China’s current account surplus and available source of the US Dollar we believe will help China to continue promoting USD/CNY ‘stability’ by ensuring no major breach higher from current levels. Recent policy actions will only help achieve that FX stability.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.