Analysts of the Financial Reus Goldman Sachs are said to think that the Onshore Chinese Yuan (CNY) will rise against the dollar for the next 12 months.
One American dollar is currently worth 7.2 CNY (USD/CNY), but Goldman predicts that the number will fall to 7.0 yuan per dollar in the coming year, Bloomberg report.
A falling USD/CNY graph indicates that the Yuan appreciates the dollar.
Explain the analysts of the investment bank,
“The undervalued levels of the currency, both on a real trade weight, but especially compared to the dollar, all point to the possibility of a stronger onshore Yuan as a potential offset for the rate of reductions.”
The analysts had previously predicted that the Yuan would be at the level of 7.35 for 12 months.
The CNY has risen 1.24% against the USD in the past month and 0.31% in the last five days.
Analysts at BNP Paribas Asset Management Echo Goldman and also predict that the CNY will rise in value against the USD, according to Bloomberg.
Rick Cheung, a fixed income portfolio manager at BNP, says the news output that the Yuan will have extra advantage if the dollar continues to write off.
“If China’s growth ultimately surprises the market to reach, more than 5% and even 5.5%, it will also offer a very good recording potential.”
China used A Onshore Yuan (CNY) for domestic trade and an offshore Yuan (CNH) outside the mainland.
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