Soc Gen on the sliding yuan, forecasting USD/CNY to 7.30 in Q3 of this year
- and to 7.40 in Q4 2023 & Q1 2024
SG say that
- Market enthusiasm about China’s reopening didn't last long
- Even some of the more resilient indicators failed to mask the country’s structural problems.
- market shrugged off the recovery and is more focused on structural challenges
- this combination means the yean is likely to weaken further
SG on the People's Bank of China:
- PBoC does not seem too concerned about the yuan weakness
Which means that China's
- underwhelming growth outlook and rising expectations of further monetary easing could maintain downward pressure on the CNY for some time yet
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A glance at the chart shows work is likely to be done (I drew in an area for this to the left) for now:
