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Yuan seen consolidating near 6.75 to 6.80 versus dollar

Commerzbank expects USD/CNY to stay in the 6.75 to 6.80 band near term, with only gradual CNY appreciation.

Reported · Written up by our desk · Major Pairs

Commerzbank FX and Commodity Analyst Volkmar Baur said China’s large foreign trade surplus is helping support a firmer Chinese yuan, pointing to green technology exports as an increasingly important driver of trade inflows.

The bank cited Chinese bank foreign currency settlement data showing more US dollars entering the Chinese banking system each month than leaving it, which it said has helped state-owned banks build foreign exchange reserves.

Commerzbank expects USD/CNY to remain in a 6.75 to 6.80 range near term, forecasting a gradual appreciation of the CNY against the US dollar. It also forecast that EUR/CNY would rise as the euro strengthens.

FXStreet summarized the view that the CNY’s stability is likely to continue in the coming months, noting that for most of the past two and a half months the USD/CNY has traded sideways between 6.75 and 6.80.

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