UBS Group AG abandoned its forecast for the yuan to appreciate this year, anticipating that the trade war will continue to put pressure on the currency, hurt China’s economic growth and spur the country’s policy makers to unleash more liquidity.
“With underlying pressures on CNY set to intensify and China’s current-account surplus likely to decline notably, we see CNY coming under more depreciation pressures” despite the People’s Bank of China’s efforts to stabilize it, Wang Tao, head of China economic research at UBS in Hong Kong, wrote in a note. CNY refers to the yuan-dollar currency ticker.
