Shock Yuan Devaluation Calls Are Overblown, Top Forecaster Says

China is likely to defy expectations from some on Wall Street of big yuan devaluations against the dollar, opting instead to only moderately weaken the managed currency, according to Allan von Mehren.

The chief analyst at Danske Bank — and Bloomberg’s top yuan forecaster last quarter — sees a risk of up to a 5% measured decline in the currency over six months as the US’s trade war with China worsens. The authorities are prioritizing ambitions to be an “anchor of the world amidst all the chaos and instability,” instead of using the currency to quickly get around the tariffs, said von Mehren.