We have lifted our end-2024 target for USD/CNY to 7.21 from 7.12. The People’s Bank of China (PBoC) is studying how to carry out government bond trading in the secondary market with the finance ministry without being seen as adopting quantitative easing, DBS senior FX strategist Philip Wee.
PBoC raises the daily fixing to 7.21
“We have lifted our end-2024 target for USD/CNY to 7.21 from 7.12. PBoC raised the daily fixing from 7.0950 at the end of 1Q24 to 7.1315 last Friday.”
“The central bank is gradually shifting monetary policy from quantitative targets towards interest rates. The PBOC is studying how to carry out government bond trading in the secondary market with the finance ministry without being seen as adopting quantitative easing.”
“Year-to-date, the 10Y bond yield declined by 30 bps in China vs. a 30 bps increase in the US, while the SPX 500 rallied 17.7% vs. a slight 1.2% gain in the CSI 300 Index. However, we expect the US Dollar (USD) to decline against the Chinese Yuan (CNY) when the Federal Reserve cut cycle begins.”
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