Chinese yuan is forecast to weaken to 6.90 per dollar a year
In 12 month's time the Chinese yuan will have erased most of its gains made this year, provided the US Federal Reserve sticks to its tightening path, boosting the greenback, a Reuters poll showed.
Having strengthened more than 3 per cent since the start of 2017, the yuan is forecast to weaken to 6.90 per US dollar in a year, according to the poll of over 60 foreign exchange analysts taken July 27-Aug 2.
It was trading around 6.72 on Wednesday.
While the US dollar should benefit when the Fed starts shrinking its balance sheet, which it has said it expected to do "relatively soon", it could falter again if the central bank fails to follow through with a rate hike later this year.
At the start of the year, traders had expected faster rate hikes from the Fed and some form of stimulus from the new Trump administration would drive the dollar up strongly against emerging currencies.(economy policy)
But, the greenback has instead taken a beating on fading hopes that President Trump will be able to push through deep tax cuts and massive infrastructure spending.
That has brightened the outlook for Asian currencies.
Strong Chinese economic data over recent months has cooled worries over the yuan's weakening, leaving further scope for the People's Bank of China (PBOC) to tighten the country's domestic liquidity conditions.
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