UBS forecast USD/CNY to hit 7.5 by June 2025

UBS forecast USD/CNY to reach 7.5 by June this year:

• while growth is expected to accelerate in China, effective tariff rates could rise dramatically and be a headwind
• CNY has only partially priced in this

On the other side, UBS see continued US dollar strength.

• US activity likely to stay robust, economic data is likely to stay strong in the near term
• ongoing tariff worries for the rest of the world, if new tariffs are introduced, the US dollar could appreciate further
• US dollar to stay stronger for longer
• expect the Fed to cut for a total of 50bps of easing, in 2Q and 3Q

This article was written by Eamonn Sheridan at www.forexlive.com.