USD/CNY: Probable move to 6.5600 in early 2022 – UOB

In view of. Strategists at the Quarterly Global Outlook from UOB Group’s Global Economics & Markets Research, USD/CNY could edge higher to the 6.5600 zone in Q1 2022.

Key Quotes

“Going forward, the  CNY  will face growing  growth headwinds.  Previous calls by the  market  for  monetary  tightening  in  the  first half of the year have dissipated.  Monetary policy  is likely  to be biased  slightly  looser to cushion  slowing  growth momentum.”

“As the growth  and  monetary  policy  divergence between  US and China  continues  to close, we hold our view of a modestly higher USD/CNY in the coming quarters. Our  updated point forecasts are 6.52 in 4Q21, 6.56 in 1Q22, 6.60 in 2Q22 and 6.64 in 3Q22.”