FX Today: USD/CNY to trade at 6.90 by end-2020 – Westpac

China has engineered a strong economic rebound and the USD/CNY has moved lower from 7.06 to below the 7.00 psychological level as yesterday the pair posted a three-month low at 6.98. Economists at Westpac forecast USD/CNY at 6.90 by year-end.

Key quotes

“China’s Reminbi remains the best evidence of Asia’s promise. With the threat of an outbreak in Beijing seemingly quashed and evidence of a strong rebound in economic activity continuing to build, USD/CNY has moved materially lower over the past month. To our mind, this is most certainly a sustainable trend.” 

“We expect a further move lower in USD/CNY into the year end to around 6.90, then to near 6.60 as 2021 concludes. Note that this forecast level is still materially higher than where the Renminbi traded prior to US/China trade tensions taking hold – a low for USD/CNY of 6.30 having been seen in early-2018.”  

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