The Chinese yuan depreciated slightly against a weaker US dollar in May. The USD/CNY pair is set to trade within a 6.50-6.90 range in the short-term, economists at MUFG Bank report.

USD/CNY likely remain volatile 

“We shall see a sequential negative GDP growth in Q2. We expect a sustained but gradual recovery in Q3 and Q4. Together with a potential weaker US dollar in the second half of this year, we expect a modest trend appreciation of CNY in Q3 and Q4, but in near term, factors including recurring growth concerns, China’s covid breakouts and lockdowns, and geopolitical tensions between China and US will likely keep USD/CNY volatile and range-bound between 6.50-6.90.” 

“We expect USD/CNY to be at 6.70 by the end of Q2, 6.67 at the end of Q3, 6.64 at the end of Q4, and 6.60 at the end of Q1, 2023.”