USD/CNY to recapture the 6.50 level as yuan changes its appreciation trend – ING
|The Delta variant spread in China and Asia could drag the People's Bank of China (PBoC) into more sustained easing. Economists at ING expect the Chinese yuan to change its trend and depreciate in the coming months.
Changing trend to depreciation
“After revising down our stronger yuan view last month, we look at the economic situation, including the possible RRR cut in 4Q21 and the policy directions set by President Xi on 30 July, and we conclude a change of exchange rate direction is more likely.”
“We have changed the yuan trend from appreciation to mild depreciation until mid-2022.”
“The RRR cut in China contrasts with the Fed discussion of tapering and rising policy interest rates. This will persist for the rest of this year and even into the first half of next year. The complicated policies of control and pro-growth interact with each other, which should induce more risks to the market.”
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