The Chinese Yuan has come a long way, recovering to around 7.00/USD from the low of 7.32 in late October. Economists at Société Générale expect the USD/CNY to move slightly down toward 6.80 by the end of 2023.
CNY is likely to underperform other Asian currencies
“Our forecast is for the currency to gradually recover towards 6.80/USD by end-2023.”
“External demand for Chinese goods will likely stay weak and exports could be disrupted by the mounting toll following the easing of quarantine restrictions. This means the CNY is likely to underperform other Asian currencies like the KRW.”
“We expect the 10y Yield to rise towards 3.20% in 12 months as a result of heavy local government bond issuance, pressure on fiscal receipts and lower revenues from sizeable land sales.”