USD/CNY: Yuan to struggle to recoup recent losses – ING
|The USD/CNY pair has moved in a 6.46-6.48 range since late June. However, economists at ING expect the Chinese yuan to suffer in the coming weeks. Subsequently, the they have revised their USD/CNY forecasts for the final two quarters of the year.
Revising to a softer yuan in Q3
“We have revised our USD/CNY forecasts to 6.55 and 6.45 for the end of 3Q21 and 4Q21, respectively.”
“The pair ranged between 6.46 and 6.48 since late June. But this is likely to change as we expect a softening of the yuan in 3Q21 that will stem from more hawkish talk by the Fed but a ‘balanced’ tone by PBoC, which means no hike for this year.”
“Market sentiment on the yuan could change from appreciation to depreciation against the dollar.”
“On fundamentals, covid has subsided after a localised outbreak in Guangdong that affected electronic factory output and port operations. But most are back to normal.”
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