CNBC reports that according to Timothy Moe, co-head of Asia macro research and chief Asia-Pacific equity strategist at Goldman Sachs,  we expect the onshore Chinese yuan to strengthen to 6.5 per dollar over the next 12 months, 

“We’ve recently firmed up … in particular, our Chinese renminbi forecast from 6.7 to 6.5 on a 12 month view,” Moe told CNBC, adding that it was one of the firm’s “strongest views” for Asian currencies.

Both the onshore and offshore Chinese yuan saw a dramatic strengthening this week from levels above 6.8 against the greenback. That came as data from China’s National Bureau of Statistics showed the country’s first positive retail sales report for 2020 in August.

Moe said the strength of the Chinese currency would serve a “tailwind” for stocks in the country.

“Historical evidence is very, very clear that a strengthening currency is generally supportive for the equity market,” he said.

In particular, the more domestic-oriented parts of the market are likely to benefit as the external-facing sectors “become incrementally less competitive” against the backdrop of a stronger currency, the strategist said.