USDCNY Downtrend Intact

UBS maintains a constructive view on the CNY, forecasting further USDCNY depreciation toward 6.50 by mid-2027. The outlook is supported by robust Chinese trade surpluses and a favorable geopolitical environment.

Key Takeaways

• 1.The CNY remains a bright spot in Asia, having gained 3.4% YTD compared to an average 2% loss for Asia ex-Japan currencies.
• 2.The USDCNY downtrend is expected to continue with targets of 6.60 by year-end and 6.50 by mid-2027.
• 3.Strong trade flows and the People's Bank of China's willingness to lower the daily official fixing rate support the bearish view on USDCNY.

Table of Contents

• USDCNY downtrend intact
• Global Asset Class Preference Attractive
• CIO Forecast- USDCNY
• Global asset class preferences definitions
• Appendix
• Risk information

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