HSBC revise yuan forecasts, also lower in near term but stable further out.
Both Goldman Sachs and Morgan Stanley are along the same lines, expecting a weaker yuan to then stabilise.
- More yuan forecasts along the same lines as the Goldman Sachs forecasts
- Goldman Sachs forecasts for the yuan - lower in near term but unchanged further out on expected trade deal
- With tariffs rising to 25% for now but ongoing discussions likely to continue, we believe heightened RMB volatility should occur.
- We thus revise Q2 and Q3 USD-RMB forecasts accordingly, seeing the exchange rate at 6.95 in both quarters (from 6.70 and 6.75, respectively).
- However, we have not revised our yearend forecast and see USD-RMB at 6.75, as we believe there will be some moderation of US and China trade tensions.
Given what we have seen from the negotiations so far I am scratching my head why all three of these banks above expect tensions to ease in coming months.
'Cause so far its only gotten worse.