CNY to be fairly stable - ING

Sandeep Kanihama FXStreet Contributor

Iris Pang, economist at ING, points out that the Chinese yuan has been fairly stable against the dollar in 1Q, depreciating only 0.18%.

Key Quotes

“It has fluctuated in a narrow range of around 1.8%, following the ups and downs of the dollar index but not to the same extent. This narrow trading range could remain in place even after a trade deal has been reached. If there is disagreement on a possible deal, the central bank could demonstrate China's political independence by depreciating the yuan slightly.”

“In 2019, we think the USD/CNY will track the dollar index. Our forecast for the USD/CNY of 6.75 by the end of the year essentially tracks the development of trade talks. But we need to closely monitor the yuan's moves post-trade talks to determine if we need to revise up our yuan forecast in 2Q and 3Q. As of now, the quarterly forecasts on USD/CNY and USD/CNH are 6.85 for 2Q19 and 3Q19.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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