The PBoC’s tolerance towards CNY depreciation has started to increase recently, evidenced by the daily fixing being placed above 7.10 for two consecutive days. With structural factors supporting further upside in USDCNY, we have now revised up our 3, 6, and 12 month forecasts for the pair. Moreover, with the US and Chinese economic prospects starting to diverge, we now think USDCNY will struggle to durably break below 7.00 over the coming years.
You can read our USDCNY Outlook in full here:
Authors:
Simon Harvey, Head of FX Analysis
Nick Rees, FX Market Analyst
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