Recent trade optimism-led gains in Yuan likely to be short-lived – Reuters poll

According to the strategists polled by Reuters, the Chinese Yuan is unlikely to sustain the recent upside, induced by the US-China trade deal hopes, as the dwindling economic outlook is likely to remain a drag on the local currency in the next year.

Key Findings:

“The latest poll of over 50 currency strategists predicted the yuan weakening about 2% to 7.15 per dollar in six months and trading at 7.10 per dollar by this time next year from around 7 per dollar on Wednesday.

Still, the 12-month ahead median for the yuan was the most optimistic outlook in Reuters polls since August, when the U.S. Treasury labelled China a currency manipulator.

Hopes have risen that an initial deal may be signed soon, despite the fact no talks have been scheduled. But doubts continue over the sustainability of any agreement.

Respondents in the poll also said the yuan would gain 1-2% in the immediate aftermath if the United States and China sign a partial trade deal.”