After a falling 6% this year, the TWI of the yuan may fall only 1% more. The latest yuan weakness looks like a stretch considering China’s still relatively healthy BOP backdrop, better risk sentiment and re-anchoring of FX expectations on hopes of further activity normalization and peak Covid concerns should provide some respite for yuan. Will look to use to add CNY shorts as risk sentiment improves; forecast year-end USD/CNY at 6.95. - J.P. Morgan Strategy
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