USD/CNY has largely traded near 7.2000 since mid-January. Commerzbank economists analyze the outlook for the Chinese Yuan (CNY).
USD/CNY to remain at 7.2000 level
We expect the current Yuan weakness to continue in the first half of 2024, i.e. USD/CNY to remain at the 7.2000 level.
The Yuan is likely to remain weak as the economy continues to overcome its structural challenges, particularly real estate problems.. More stimulus measures are expected and should in principle be positive for the Yuan if the Chinese economy can gain a foothold. However, the effectiveness of the measures can be called into question.
The foreseeable rate cuts by the US Fed will alleviate pressures on the Yuan at the end of the year.
Source: Commerzbank Research
Source: Fx Street
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