Chinese Yuan Currency Exchange Rate Forecast

Chinese Yuan Currency Exchange Rate Forecast

From the end of the year, the probability of the RMB exchange rate will remain between 6.8 and 7.0, which also needs to observe the progress of trade negotiations and the policy prospects of the Fed to raise interest rates.

The pressure of RMB depreciation will decrease in the coming year and may even appreciate. The reason is that, first of all, Powell's dovish speech means that the Fed's current interest rate hike cycle is nearing completion, and the frequency of interest rate hikes will also decline. Coupled with the limited space of US fiscal policy, the US dollar is likely to weaken in 2019; Secondly, from the perspective of China's economic fundamentals, there is limited pressure on the depreciation of the RMB in the future.

Looking forward to next year, for China in 2019, the external financial environment will improve and the pressure on the RMB exchange rate will be reduced. The external constraints of loose domestic monetary policy are relaxed. With the improvement of financing and the emergence of policy effects, social welfare is expected to stabilize in the second quarter of next year, and the economy is expected to bottom out in the third quarter.