FXStreet reports that Amy Yuan Zhuang from Nordea thinks that elevated uncertainty about COVID-19 as well as its impacts on the global economy will likely keep weakening pressure on the yuan against the dollar, as capital is flowing to safe-haven assets. 

“In the near-term, the direction of USD/CNY will be dictated more by global risk sentiment than the domestic development in China.” 

“We revise our USD/CNY forecasts and expect the pair to reach 7.15 on a three-month horizon. Nevertheless, our new USD/CNY forecasts do not match our new GDP forecasts in bearishness because we think the PBoC will continue to be the last line of defence for the CNY.” 

“The PBoC has been intervening through verbal support and a stronger daily fixing rate, which we expect it to continue as long as weakening pressure persists.”