USD/CNY has largely traded close to 7.2000 since mid-January. Economists at Commerzbank analyze Chinese Yuan’s (CNY) outlook.
USD/CNY will stay at the 7.2000 level
We expect the current Yuan weakness to remain in H1 2024, i.e. USD/CNY will stay at the 7.2000 level.
The Yuan will likely remain weak as the economy continues to muddle through its structural challenges, notably the real estate troubles. More policy stimulus is expected and should in principle be positive to the yuan if China’s economy could gain a firmer footing. However, the effectiveness of the measures may come into question.
The anticipated US Fed rate cuts will ease pressures on the Yuan later this year.
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