China's official PMIs for May came in better than expected. CNY will likely benefit from today's data but economists at TD Securities still expect USD/CNY to inch higher towards 6.80 by end-2022.

China PMIs bounce, but remain in contraction

“China's manufacturing and non-manufacturing PMIs remained in contraction in May but gained more than expected to 49.6 and 47.8, respectively.”

“CNY will likely benefit from today's data, giving further short-term support to the currency.”

“We expect further CNY depreciation vs USD and on a trade-weighted basis in the months ahead, forecasting USD/CNY at 6.80 and CFETS at 95.7 by end-2022 as a likely weakening in the current account position, and reduced inflows will weaken underlying support for the currency.”