Chinese Yuan: Pace of appreciation against US Dollar seen slowing – ING
Chris Turner at ING notes USD/CNH is consolidating after last week’s sharp decline, as investors hesitate to buy Renminbi with the PBoC slowing lower USD/CNY fixings and US–Iran sanctions risks in focus.
ING analyst Chris Turner has observed the Chinese yuan (Renminbi) losing momentum in its appreciation against the US dollar (USD). After a significant drop last week, the USD/CNH exchange rate appears to be stabilizing. Turner suggests that this consolidation may continue over the next several months, with a projected gradual weakening of the dollar.
Two factors may be contributing to the cautious approach among investors: the People's Bank of China (PBoC) appears to be reducing the speed of its lower fixings for USD/CNY, which could signal discontent with the recent pace of Renminbi appreciation. Additionally, there are concerns that the recent US sanctions on Iran may disrupt the economic relationship between the US and China.
Turner believes it is premature to anticipate any punitive measures against major Chinese entities involved in Iran trade, but market participants will be closely monitoring the situation. Turner's base case currently anticipates a gradual decline in the dollar, with the USD/CNY exchange rate potentially reaching 6.70 in the coming months.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
