China Expected to Weaken the Yuan Further if Trade War Prolongs: Reuters Poll

According to a Reuters poll, China is expected to intervene and weaken its currency further if the trade war with the US drags on for longer

Chinese yuan

According to a Reuters poll, China is expected to intervene and weaken its currency further if the trade war with the US drags on for longer. After the US imposed the latest round of tariffs on Chinese goods, the PBOC had set the official midpoint rate of the Yuan at an 11.5 year low against the dollar.

Last month, China’s central bank had allowed the yuan to fall below the key level at 7 against the USD. This move as well as the most recent development caused the US to accuse China of manipulating its currency, with the US raising the issue with the IMF as well.

Nearly 60 economists polled by Reuters anticipate the yuan to slide up to 0.5% lower for the USD/CNH to trade around 7.19 in the next six months. In a year’s time, it could adjust and move up to 7.16.

Analysts have lowered their outlook for the yuan’s value for the third consecutive month. Weakening the yuan more would be the next move China would resort to in the trade war with the US.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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