USD/CNY seen at 7.25 by year-end as Yuan starts to recover – ANZ

CNY recently weakened to levels last seen in December 2007. Economists at ANZ Bank analyze Yuan’s outlook.

CNY to recover later in the year 

We see CNY weakness as largely cyclical and expect the currency to recover later in the year once we get clearer signs that China’s growth is starting to recover. A more meaningful rebound, however, will require US bond yields to decline, which is still some way off given the resilience of the US economy. 

We are only looking for a modest recovery in CNY to 7.25 by year-end.