Banks Revise Yuan Forecasts Citing China Export Strength, US Trade Stability
Global Investment Houses Adjust Yuan Outlook Amid Economic Trends
SHANGHAI, May 18 (Reuters) - Some global investment houses revised up their yuan forecasts, fuelled by China's export competitiveness and steady trade relations with the U.S., the world's biggest economy.
The Chinese currency has been grinding higher this year, rising nearly 3% against the dollar so far to 6.8040 per dollar on Monday, and is up about 2.6% versus its major trading partners.
Key Details of Yuan Forecast Revisions
Here are some details:
HSBC's Perspective on Yuan Appreciation
• HSBC bets on a fundamental case for modest further yuan appreciation and has raised its forecasts to 6.65 per dollar by year-end from 6.75 previously.
Drivers of HSBC's Forecast
• On top of highly competitive exports, "RMB internationalisation, long-term diversification from USD and economic rebalancing are key domestic structural themes supporting the RMB. Externally, U.S.-China economic relations have become stable and more constructive since May 2025," HSBC analysts said in a note.
Deutsche Bank's Yuan Outlook
• Deutsche Bank expects this year's strong Chinese import growth to pave the way for further yuan gains.
Factors Influencing Deutsche Bank's View
• "A surge in China's imports of upstream products will likely be followed by a further pickup in export orders, or a recovery of domestic demand, or both," Deutsche Bank economists Yi Xiong and Deyun Ou said in a note.
• Deustche Bank's baseline forecast is for the currency to strengthen to 6.55 per dollar at end-2026 from 6.7 previously.
Goldman Sachs' Yuan Projections
• Goldman Sachs also sees scope for further and "longer-lasting" yuan strength, underpinned by China's unprecedented external surplus and strong export competitiveness.
Medium-Term Outlook by Goldman Sachs
• Despite headwinds from the Iran war and higher energy costs, Goldman said the medium-term outlook remains positive, supported by expected global investment in energy security and renewables, which would benefit China's exports.
• The U.S. bank expects the yuan to hit 6.80, 6.70 and 6.50 per dollar in three, six and 12 months, compared to 6.85, 6.80 and 6.70 previously.
Reporting and Editorial Notes
(Reporting by Shanghai NewsroomEditing by Shri Navaratnam)
