HSBC revise yuan forecasts, also lower in near term but stable further out.

Author: Eamonn Sheridan | Category: News

Both Goldman Sachs and Morgan Stanley are along the same lines, expecting a weaker yuan to then stabilise.

  • 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. 
Politics inspired?
 'Cause so far its only gotten worse. 

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