Yuan Trades Near Six-Year Low as Fed Rate Bets Add to Pressure
- Inevitable that currency will drop to 7.1 a dollar: SocGen
- One-day repo rate rises for sixth day as PBOC drains cash
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China’s yuan erased early gains to trade near a six-year low amid concern that a potential Federal Reserve interest-rate increase will pressure the currency lower.
It is “inevitable” that the onshore yuan will head toward 7.1 a dollar in the coming 12 months, according to a research note from Societe Generale SA Tuesday. It added that the current weakness could last for another two to three months, as indicated in patterns observed since 2014. The median forecast in a Bloomberg survey is for the Chinese currency to finish this year at 6.75 a dollar, and to end 2018 at 6.82.