The People’s Bank of China (PBoC) will continue to effectively manage market expectations of the CNY exchange rates. In the view of economists at Commerzbank, authorities would like a USD/CNY return to the 7 level.

PBoC will allow the CNY to depreciate against the USD in a controllable manner 

“We expect the PBoC will continue to use the daily fixing as the main tool to manage the CNY. It could supplement this with other instruments to manage foreign currency liquidity in China.”

“We suspect the PBoC will allow the CNY to depreciate against the USD in a controllable manner, provided currencies of China’s major trading partners are also depreciating against the USD. This will keep the CNY relatively stable on a trade-weighted basis.” 

“From a medium-term perspective, it’s likely that the PBoC would prefer USD/CNY to return to the 7 mark.”