USD/CNY: Yuan could see “small further gains” to 6.2 by the end of this year – Goldman Sachs

In its latest China market analysis, Goldman Sachs (GS) cites challenges to the growth should the world’s second-largest economy adheres to nationwide lockdown due to the South African covid variant, namely Omicron.

“China's nominal economic growth could plummet to 1.5% this year if it reintroduces a nationwide lockdown due to the Omicron variant,” said GS.

Key quotes

China maintains a meaningful current account surplus.

Also helping would be solid net portfolio inflows driven by index inclusions and a potential acceleration in equity purchases by foreigners with domestic stocks likely performing better this year than last.

FX implications

USD/CNY takes the bids to refresh intraday high around $6.3830 by the press time of early Friday morning in Asia.

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