Yuan faces stronger depreciation in H2 2021 – China Press

The Chinese yuan is likely to remain vulnerable to downside pressures in the second half of this year, as the US dollar may rebound on accelerated recovery and tightening of monetary policy, the PBOC-run newspaper Financial News reports, citing analysts.

Key quotes

“The Federal Reserve is expected to release a signal of QE reduction in Q3 amid increased inflation, and China will not follow up any interest rate hikes quickly, possibly leading to further narrowed spread over the two countries’ interest rates, or even a reversed spread that may push the dollar stronger.”

“The US and other developed countries are expected to basically achieve herd immunity in Q3, and the growth gap may narrow if the Chinese economy slows down in H2 while the US recovery speeds up.”

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