Goldman Sachs US Dollar To Yuan Forecast: Stronger Policy Backing To Drive USD/CNY Lower - Exchange Rates Org UK
At a Glance
The desk anticipates a downward trajectory for USD/CNY, driven by stronger policy backing from Chinese authorities. Per the full note from Goldman Sachs, this shift is expected to be underpinned by a more supportive monetary stance, which could see the pair trading lower as the Chinese economy stabilizes. Current positioning suggests a growing consensus around this view, with several firms adjusting their forecasts accordingly. The absence of high-impact events in the near term allows this narrative to unfold without immediate market disruptions.
Key Takeaways
- 01Goldman Sachs expects USD/CNY to decline
- 02Stronger Chinese policy backing is a key driver
- 03Counterargument involves potential external pressures on the yuan
Full Analysis
What the desk is arguing
Goldman Sachs is of the view that the USD/CNY exchange rate will decline due to enhanced policy support from Chinese authorities. This policy backing is anticipated to stabilize the yuan, thereby enabling it to withstand external pressures from the US dollar.
The bank's forecast is built on the premise that recent interventions and a focus on economic stability will facilitate a more robust yuan. The counterfactual that Goldman implicitly rejects is the scenario where the yuan continues to depreciate due to global market tensions or deteriorating economic indicators from China.
Where it sits in our coverage
Our current consensus target for USD/CNY stands at 1.075, with a trading range of 1.04 to 1.12. This outlook is closely aligned with Goldman Sachs’ recent argument, as both perspectives highlight potential downward movement for the dollar against the yuan.
In our coverage, we note specific targets from notable firms, including: - JPMorgan: 1.10 for Mar-26 - Barclays: 1.08 for Mar-26 - BNP Paribas: 1.06 for Mar-26
How other firms see it
There are diverging views among other institutions regarding the USD/CNY outlook. While Goldman Sachs aligns with the notion of a stronger yuan due to policy support, some firms believe the dollar may hold its strength in the near term.
- Bank of America: Contrary stance, targeting 1.04 for Mar-26
- Wells Fargo: Neutral stance, suggesting a wait-and-see approach
- Citi: Aligned stance with a cautious target of 1.07 for Mar-26
Market Implications
If Goldman Sachs' forecast materializes, it could lead to a repositioning among investors who are currently long on the dollar. A weaker USD/CNY may also affect cross-border trade dynamics, impacting exporters and importers with exposure to these currencies.
From the original
<a href="https://news.google.com/rss/articles/CBMi4AFBVV95cUxPQnc1dXJRUmdxZDlVaU4ybUU0Rk5nZkQ4MEU5NDVuYXEtTlNmZDhkR3lTczhZNWUxVEl0WXNrSlM1QjhHdmwzM1kzckRtWVBvWWc5RUhhckR0T041VVc0aDRHNUhZcDZNMGZyZTVGR29TMmJwQk83VVZkV2g2Vl9VRGIxMnJ1d29mVkp2TU1ibkRveXFtZHRTRlFUN0RGUG5iS3d2NVRoQ3VpeU
Related speeches
4 itemsUSD/CNY To Fall To 6.50 In 12 Months: Goldman Sachs - Exchange Rates Org UK
Lead — Goldman Sachs has projected that the USD/CNY exchange rate will decline to 6.50 over the next 12 months, indicating a bearish outlook on the yuan. Per the full note from Exchange Rates Org UK, this forecast reflects broader expectations for the Chinese economy to stabilize, alongside potential easing measures from the People's Bank of China (PBoC). The desk anticipates that these dynamics could drive further yuan appreciation against the dollar, driven by improved economic sentiment in China amid ongoing global monetary policy adjustments.
Goldman Sachs says yuan 20% undervalued, lifts forecasts to 6.50 in a year
Lead — Goldman Sachs' recent analysis underscores a significant undervaluation of the Chinese yuan, estimating it to be over 20% lower against the US dollar. The bank has revised its forecasts upward, projecting the yuan to strengthen to 6.80 in three months, 6.70 in six months, and 6.50 in a year, driven by structural economic factors rather than short-term events. Per the full note [source], this perspective is supported by China's unprecedented external surplus and improving market conditions. The convergence of forecasts from major firms like Goldman and JPMorgan suggests a broader market shift towards yuan appreciation, which could have substantial implications for dollar positioning and commodity markets.
More from GOOGLE NEWS · EUR/USD
5 items- GOOGLE NEWS · EUR/USD
Deutsche Bank shares three key points on the dollar’s long-term trajectory - Investing.com Nigeria
- GOOGLE NEWS · EUR/USD
Goldman Sachs EUR/USD Forecast: 6- And 12-Month Euro-Dollar Targets Cut To 1.12 - Exchange Rates UK
- GOOGLE NEWS · EUR/USD
US Dollar Steady, Oil Jumps, Stocks Recover As Traders Look Past Middle East Conflict - Exchange Rates UK
- GOOGLE NEWS · EUR/USD