- Currency may weaken to 7 per dollar early next year: survey
- Policy makers may refrain from intervention, respondents say
The yuan’s forecasters are turning more bearish.
The Chinese currency will weaken to 7 against the greenback -- a level unseen since before the global financial crisis -- in the first half of next year, according to 14 of 16 analysts and traders surveyed by Bloomberg this week. Ten said policy makers may refrain from propping up the yuan, with Royal Bank of Scotland Group Plc citing the nation’s shrinking foreign-exchange reserves. Mizuho Securities Asia Ltd. said the level could be breached this year, while Oversea-Chinese Banking Corp. sees it happening possibly in January.
The views are a sharp from a similar poll conducted just three weeks ago, when respondents said China would limit excessive yuan declines and that the currency would hold its ground against an index of trading partners. The situation has changed since then, with Donald Trump’s surprise victory in the U.S. presidential election prompting a of banks to lower their forecasts for the currency. The Republican has threatened to brand China a currency manipulator and slap tariffs on the nation’s exports.
“The psychological level of 7 is important," said Eddie Cheung, a foreign-exchange strategist at Standard Chartered Plc in Hong Kong. “A...
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