USD/CNY to lurch higher towards 6.70 and 6.80 by year-end and end-2023 respectively – Commerzbank

Economists at Commerzbank are seeing depreciation pressure for the Chinese currency over the coming year given the policy divergence between the People’s Bank of China (PBoC) and Federal Reserve (Fed) 

A weakening bias for CNY

“The Chinese economy is set to slow further as the property softness and Covid-induced consumption weakens remain the key drag. The economic growth is expected to slow to 4.5% in 2022, down sharply from about 8% growth in 2021.”

“A strong dollar due to policy tightening is likely to the main theme in the coming years. After the PBoC's recent rate cuts, the narrowing US-China yield differentials would pose downside bias to the Chinese currency.”

“We forecast 6.7 and 6.8 for USD/CNY at year-end of 2022 and 2023 respectively.”