tl;dr
Goldman Sachs analysts predict the onshore Chinese yuan (CNY) will appreciate against the US dollar over the next 12 months, forecasting the USD/CNY rate to fall from 7.2 to 7.0. They cite the yuan's undervaluation, especially versus the dollar, as a factor for potential strength, revising their pre...
Goldman Sachs analysts predict the onshore Chinese yuan (CNY) will appreciate against the US dollar over the next 12 months, forecasting the USD/CNY rate to decline from 7.2 to 7.0.
They highlight the yuan's undervaluation, particularly versus the dollar, as a strong factor for potential strength, revising their prior forecast from 7.35 to 7.0.
In the past month, the CNY has risen 1.24% against the USD, and 0.31% over the last five days.
BNP Paribas Asset Management analysts share a similar outlook, expecting further yuan appreciation if the US dollar weakens and China's economic growth surpasses market expectations, potentially exceeding 5% to 5.5%.
Rick Cheung, fixed income portfolio manager at BNP, suggests that stronger-than-expected growth in China would enhance the yuan’s upward momentum.
It’s important to note that China uses the onshore yuan (CNY) domestically and the offshore yuan (CNH) internationally, with the analysts focusing on the onshore currency's movement.
Overall, these forecasts signal a significant potential shift in currency markets, with the yuan strengthening as a possible offset to tariff impacts and global economic trends.