Despite news of potential tariff reductions, economists at Credit Suisse still think that upside to Chinese exports and the yuan is limited. They target 6.95 in USD/CNH. 

Continued upward USD momentum against EUR and JPY points to higher USD/CNH

“Although a tariff reduction runs counter to our initial scepticism, we still think that upside to Chinese exports and the yuan is limited. Tariff reduction will do little to change the rotation of US / European spending away from Asian-made goods and towards services.”

“We think that the scope for further trade-weighted yuan appreciation is limited. As USD looks set to continue to gain against EUR and JPY, USD/CNH will continue to rise even as the PBoC targets CFETS RMB Index stability.”

“We stay long USD/CNH, targeting 6.95.”