USD/CNY is hovering around the 6.70 level. Economists at Westpac expect the Chinese renminbi to strengthen throughout the coming months, therefore, USD/CNY is seen at 6.35 by the end of the year.

Economic activity driving Chinese growth should be favourable for CNY

“While growth in the US and Europe has collapsed below potential and is expected to remain there in 2023, momentum in China’s economy is expected to hold around trend through both years. Moreover, the economic activity driving this growth should be favourable for the currency, with the investment being undertaken in the economy targeted at increasing efficiency, productivity and boosting the trade balance.” 

“The ongoing reforms being undertaken by authorities and the starting valuations for equities are also supportive of financial flows into China, in addition to those related to trade.”

“We continue to have a bullish expectation for renminbi, expecting USD/CNY to fall from 6.70 currently to 6.35 end-2022 and 6.15 end-2023.”