USD/CNY: Capped below 7.18 – Westpac

China is to hold its annual NPC on 22 May. Economists at Westpac Institutional Bank forecast the outlook of the Chinese yuan. USD/CNY is trading at 7.0885.

Key quotes

“Policy preference should be for a stable CNY, which is conducive to fund raising and to bond inflows, while export competitiveness does not appear to be a major concern right now.”

“USD/CNY may be capped below 7.18 for now and may continue to trade in a range with a mild downward bias.”