#USDCNY @ 6.88043 -imp levels: to trade in a new and higher range for the rest of 2022 and into first half of 2023 – HSBC
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USD/CNY has recently broken above the closely watched 6.80 level. Economists at HSBC expect the CNY’s depreciation to be more gradual and modest this time around.
“Currency-wise, USD/CNY has recently broken above the closely watched 6.80 level. We think this means USD/CNY will likely trade in a new and higher range for the rest of the year and into the first half of next year.”
“USD/CNY jumped significantly in April-May after it broke above 6.40; however, we do not think the upside momentum will be as strong this time around, as China-US yield differentials appear to be stabilising and the CNY’s overvaluation has been pared.”
“Notwithstanding the recent upward momentum, it is possible for USD/CNY to reverse course later and fall instead, triggered by potential catalysts. For example, if US-China trade relations were to improve and/or China’s dynamic zero COVID-19 policy were to relax, USD/CNY could decline instead.”
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