USD/CNH seen at 7.08 through Q3 and 6.85 through Q4 – CIBC

Policy beta to CNH should dissipate a bit, which suggests modest downside for USD/CNH in the near-term, economists at CIBC Capital Markets report.

Biggest CNH bulls may be disappointed

Incoming policy support, and the reversal of the overvalued USD, supports our forecast of USD/CNH at 7.08 through Q3 and 6.85 through Q4.

The CNH should rally over the coming year on a declining USD and eventual fiscal support, but the biggest CNH bulls may be disappointed.

See: USD/CNY will likely continue to trade largely between the 7.10 and 7.20 range – Commerzbank