USD/CNY to see substantial gains towards 6.70 by year-end – ING

Combining the risks and the opportunities, economists at ING have scaled down their GDP growth and USD/CNY forecasts for the second half of 2021. 

GDP growth and USD/CNY forecasts

“We expect GDP growth to slow to 4.5% YoY and 5.0% YoY in 3Q21 and 4Q21, respectively, with the full-year forecast of 8.9%, down from 9.2% back in July.”

“With weaker growth, we expect monetary policy in China to diverge from that of the US, resulting in a narrower interest rate spread. Following this, capital inflows could slow or even experience a small reversal.”

“We forecast USD/CNY to reach 6.70 by the end of the year from the estimate of 6.45 made in July.”