Retreating U.S. dollar set to give reprieve to Chinese yuan

Victor Refael

The Chinese yuan is expected to slip only slightly over the coming year, a Reuters poll of currency strategists showed, as markets move to price in more U.S. Federal Reserve interest rate hikes than the three currently expected.An upbeat assessment of the U.S. economy from the Federal Reserve’s new chairman Jerome Powell last month and the administration’s tax cuts have raised analyst expectations the central bank may deliver four hike rates rather than three this year. However, recent bearish sentiment toward the dollar has left forecasts for the yuan less pessimistic than they were a month ago, with markets currently cautious about pricing in that fourth Fed hike in 2018.


U.S. President Donald Trump’s decision last week to impose hefty tariffs on imports of steel and aluminum sparked concerns of a full-scale trade war and has made the dollar outlook murkier. Still, the yuan, which is up more than 2 percent this year so far, is predicted to weaken to 6.40 per dollar in six months and trade at that level in a year, according to the poll of nearly 60 foreign exchange strategists taken March 1-6. This has also left an impact on traders and the market at large. Trading on MultiplyMarket gives you an edge in the market, as you are brought to speed on various market trends. As a trader when you trade with MultiplyMarket, you will be accustomed to the winning mentality.