A generally managed deprecation is the most likely trajectory for USD/CNY in the coming year, in the view of economists at Commerzbank. They forecast that the USD/CNY pair will reach 6.70 by the end of 2022.

A weakening bias for CNY

“We are seeing depreciation pressure for the Chinese currency over the coming year. The Chinese economy is set to slow further as the property softness and Covid-induced consumption weakens remain the key drag.”

“A strong dollar due to policy tightening is likely to the main them in the coming years, while China has much smaller room to maneuver which implies a downside risk for the Chinese currency.”

“We forecast 6.7 and 6.8 for USD/CNY at year end of 2022 and 2023 respectively.”