The Chinese yuan depreciated by 3% against the US dollar in September. Downward pressure on CNY is set to remain for the rest of this year but the USD/CNY is set to reverse back lower in 2023, economists at MUFG Bank report.

USD/CNY may remain volatile in the near-term

“While USD/CNY may remain volatile in the near term and supported from the Fed’s rate hiking process, we expect moderately improved sentiment to warrant a slightly stronger CNY.”

“We expect USD/CNY to reach 7.0500 in Q4 2022, 6.9500 in Q1 2023, 6.8500 in Q2 2023 and 6.7500 in Q3 2023.”