USD/CNY: Yuan to enjoy a 5% appreciation against the Dollar in 2024 – MUFG

CNY depreciated by 3.6% year-to-date against the US Dollar. Economists at MUFG Bank analyze USD/CNY outlook.

Yuan to appreciate on a more balanced economic recovery 

We hold a positive outlook for CNY against the Dollar, due to the considerations of a gradual and more balanced economic recovery in 2024, narrower negative yield spread between China and US, recovering market sentiments towards Chinese economy and assets, and the significant underweight of Chinese assets (both equity and bonds).

We expect a 5% appreciation of CNY against the Dollar in 2024.

We forecast USD/CNY to reach 7.05 by the end of 1Q2024 and 6.80 by the end of 2024.