Usdcny Price Will Go Higher By End Of 2023

 Usdcny Price Will Go Higher By End Of 2023

USD/CNY Price Will Touch 7.60 By 2023's End

According to SocGen economists, the USD/CNY pair will turn higher and close in the year 2023 near the 7.60 level. Earlier, the forecasted levels for the USD/CNY which is now revised higher after the recent economic situation.

If we consider the recent forecast made by SocGen, it becomes apparent that they are suggesting more USD strength and a weakness in the Chinese Yuan.

The previous forecast for the USD/CNY was set near 7.40, which is now revised higher with a change of +0.20%. As for the reasons behind the appreciation of the USD and the weakness of the CNY, SocGen cited how the policy response is not as organized as it used to be in the past.

That's one of the reasons why the US Dollar/Chinese Yuan pair is highly likely to overshoot as opposed to undershooting. If we look ahead, there are still a couple more months left before the end of 2023, and the pair is currently trading near the 7.26 level.

USD/CNY Must Overcome Upcoming Resistance Levels

Based on the current levels of the USD/CNY, the important resistance zones are 7.30, 7.35, 7.40, 7.45, 7.50, and then 7.60, which is also the target set by SocGen.

For now, the weakness in the CNY is mainly driven by the fundamental indicators. At the same time, the Public Bank of China's policy measures are not as effective as they used to be in the past. On the other hand, the USD is strong mainly because of the interest rate difference between the USA and China.

On the Chinese side, we have already seen a few rate cuts, while anything like that from the US side is highly unlikely. In fact, the PBoC is also ready to introduce more rate cuts if needed to support the economy.

So even if we set SocGen's forecast aside for a moment, even the fundamental outlook for the USD/CNY favors more upside rather than a downtrend.

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