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Goldman Sachs says the offshore Yuan (CNH) is unlikely to strengthen much further in the absence of a broader trade deal that rolls back existing tariffs.

As a part of the partial deal announced on Friday, the US has only agreed to delay the levy on $250 billion of Chinese goods from the current 25% to 30%. The tariff hike was scheduled to take effect on Oct. 15.  

Goldman still expects CNH to weaken to 7.20 per US Dollar in three and six months, before recovering to 7.10 in 12 months.  

Key points

Short-lived pauses in trade tensions have in the past given way to renewed escalation rather than a roll-back of the trade war.  

If anything, disagreements have spread to more dimensions- technology, financial flows, immigration, foreign policy- such that finding ramps to de-escalate is even harder.