Fundamentals and yield differentials remain supportive of the CNY in the medium-term but the appreciation pace may slow as exports competitiveness comes back as a hindrance, economists at Westpac report.
Key quotes
“October activity data from China reflect that the production-led recovery is sustained, with consumption playing catch-up.”
“While fundamentals and yield differentials remain as supportive factors for the CNY, the pace of appreciation may slow, if exports competitiveness comes back into the policy equation as the first mover advantage in production/exports is fading.”
“We expect a near-term range for USD/CNY at 6.50/6.58.”
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