Chinese Yuan May Reach 7.3/dollar By Year End, Says CLSA Chief Economist

The trade tensions between China and the United States continue weakening the Chinese Yuan against dollar. This is according to the CLSA Chief Economist Eric Fishwick. As per Eric’s predictions, Yuan may reach 7.3/dollar by the year end. But, on Tuesday morning Yuan traded 7.1144 against US dollar. 

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Fishwick exclaimed CNBC’s “Street Signs” on Monday saying,

“Looking at how the currency trades, it is very clearly demonstrated that it is being used as a way to offset the effects of tariffs. So, the yuan is allowed to weaken whenever the U.S. ratchets the tension higher.” 

He further added to it, 

“I think that the forces that are pushing the Yuan lower are still in place.”

The investors, economists and other market watchers are seeing Yuan as one of the tools that China can use to respond back to the rising U.S. tariffs. China’s yuan, also known as renminbi can make China’s exports much cheaper on international markets. 

With the start of 2020, the Yuan can get modestly stronger, according to Fishwick. He added saying that, 

“Looking into next year, for the first time in a long time, we’re able to talk about the prospects for the dollar weakening again”.

The American economy is slowing down and there are chances that it may experience a recession. Fishwick also expects that U.S. Federal Reserve may cut interest rates in the next year.

“Also, the U.S. looks more and more like a conventional late-cycle economy. I’ve brought my forecast down for the U.S. in 2020.” 

Fishwick also expects that four rate cuts next year from U.S. central bank. 

“As the market focuses on those prospects for rate cuts, that’s the point at which I would expect the dollar to start to depreciate.”

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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