Economists at Société Générale see little room for the USD/CNY to head lower to 6.30 by the year-end and expect the yuan to weaken afterwards. They expect the pair to reach the 6.50 level in the second half of 2022.

Weaker CNY call delayed, not dismissed

“We see a small window for the USD/CNY to head lower to 6.30 by the end of 2021. Our view remains that the CNY will weaken, given our expectations of a further slowdown in China’s growth and a strengthening USD next year.”

“Over the course of 2022, we expect the USD/CNY to bottom out and grind higher to 6.35 in 1Q, 6.45 in 2Q and reach a plateau of 6.50 in 2H.”