Goldman Says Yuan 20% Undervalued, Boosts Currency Forecasts

The Chinese yuan is more than 20% undervalued against the US dollar, according to Goldman Sachs Group Inc., which expects the currency to keep strengthening over the coming year.

The yuan remains well below levels justified by China’s export strength and external surplus, strategists including Kamakshya Trivedi said. They now see it at 6.80 in three months, 6.70 in six months and 6.50 in a year, up from 6.85, 6.80 and 6.70 previously. The currency is currently trading at around 6.80.