Overall, a stronger yuan is likely to spur more inflows and further boost demand for the currency, which would support Beijing’s push to promote its use globally.
But China’s state media has sought to temper the optimism, noting on Wednesday that the currency’s recent rally is unlikely to alter the trend of its two-way movements. says the yuan may rise to 6.15 in a year if there’s a “meaningful” easing in US trade frictions and a clearer move lower in the dollar. The currency could climb to 6.20 per dollar, a level it last reached before it was devalued in 2015, if there’s further progress in US-China talks, he added. “China’s export boom will continue into the first quarter of 2022, sustaining the nation’s large trade surplus,” said Scotiabank foreign-exchange strategist Qi Gao.
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