Economists at TD Securities think the Chinese Yuan is likely to maintain downward trajectory versus the US Dollar. USDCNY is set to reach 7.40 by the end of the year.

It is hard to be optimistic on CNY

“Without a clear roadmap out from its zero-COVID strategy, it is hard to be optimistic on CNY, with growth prospects increasingly dim and the PBoC keeping to an accommodative monetary policy stance to support growth.” 

“We expect a further depreciation of the CNY in the months ahead and see USDCNY ending at 7.40 by end 2022 though we expect some outperformance relative to forwards.”