Economists at Commerzbank expect CNY to appreciate modestly against USD in the second half given the expected softening of the Dollar, but the outlook is highly uncertain.

CNY will likely depreciate against EUR

“We expect CNY to appreciate modestly against USD in H2 given the expected softening of the Dollar. This is largely based on the assumption that China’s economic recovery will remain at a decent pace and in line with what market expects, especially for H2.”

“However, the outlook for USD/CNY is largely uncertain. In contrast to our baseline forecast which sees it moving lower, it could instead rise towards 7 or beyond in H2.”

“EUR/CNY will likely move upward. The currency pair should benefit from the further tightening of ECB monetary policy for the time being.”

Source: Commerzbank Research