USD/CNY to rise to 7.1 by year-end – BBVA

Matías Salord FXStreet

According to the Research Department at BBVA, the RMB to USD exchange rate is set to depreciate due to the diverging monetary policy between China and the United States. They see the USD/CNY at 7.1 at the end of the year.

Key Quotes:

“Chinese economy has experienced a bumpy recovery after the Shanghai lockdown was lifted. We lowered our 2022 prediction from 4.5% to 3.6%.”

“RMB to USD exchange rate is anticipated to depreciate to 7.1 at end-2022 reflecting the recent interest rate cut and the recent breaking-7 trend, amid the diverging monetary policy between China and the US, a stronger USD DXY, slower exports, and capital outflows etc.”

“Depreciation pressure is not only for RMB, but for all EM currencies AM currencies that have a slower pace of rate hike than the FED (JPY, GBP, Euro etc.) , and among all EM currencies, RMB probably depreciated modestly due to capital control measures.”

“We predict RMB to USD exchange rate will be tightly related to USD DXY trend. Based on our forecast of FED interest rate hike path, RMB will depreciate to 7.1 at end-2022, 7 at end-2023 and 6.9% at end-2024.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Ethereum Price Forecast: BitMine extends ETH buying streak, says long-term outlook remains positive

Ethereum (ETH) treasury firm BitMine Immersion continued its weekly purchase of the top altcoin last week after acquiring 45,759 ETH.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.