Stephen Jen Sees Chinese Yuan Rallying by Record 9% This Year

China may permit record yuan appreciation this year as it tries to boost confidence in its currency and enhance local companies’ purchasing power overseas, according to Stephen Jen, chief investment officer at Eurizon SLJ Capital.

Jen, who is best known for his “dollar smile” theory on what drives the dollar, sees the currency strengthening to 6.2 to 6.4 per dollar by year-end, as much as 9% above current levels. That kind of exchange rate would better reflect the Chinese economy’s strength, giving authorities a clear incentive to permit appreciation, he said in an interview.