Anna 
Economists at Bank of Tokyo-Mitsubishi UFJ (MUFG) project a positive outlook for the Chinese yuan (RMB) against the US dollar, anticipating a gradual and more balanced economic recovery in 2024. The forecast is based on several factors, including the narrowing of negative yield spreads between China and the United States, a recovery in market sentiment towards the Chinese economy and assets, and comparatively lower valuations of Chinese assets, including stocks and bonds.
As of the year-to-date, the yuan has experienced a depreciation of 3.6% against the dollar. However, MUFG analysts expect a reversal of this trend, projecting a 5% appreciation of the yuan against the US dollar in 2024.
The specific forecasts for USD/CNY indicate an expected exchange rate of 7.05 by the end of Q1 2024, with a further appreciation to 6.80 by the conclusion of the entire year. This optimistic outlook is underpinned by the anticipated factors contributing to a more balanced economic recovery, which is expected to positively influence the yuan’s performance against the US dollar.
