CN CNY Chinese Yuan Loading... : Bullish and Bearish Analyst Opinions

Traders increased bets on a stronger yuan, anticipating that increased global usage and attractive valuation will help China's currency navigate near-term challenges.

Brad Setser argues that the swing in settlement data from China's trade surplus is creating real appreciation pressure on the CNY, but the tweet is a pushback on a quoted view rather than an explicit trade call.

The tweet discusses controlled CNY appreciation and orchestrated TWD depreciation without expressing a forward-looking directional view on either currency.

RMB to appreciate significantly over years

Brad_Setser argues that all of Asia needs to appreciate, implying a weaker USD and stronger Asian currencies, with a stronger CNY pulling others like TWD higher.

Brad_Setser argues China's yuan is undervalued against most currencies and a weaker dollar would further weaken the CNY, implying persistent currency pressure.

The author expresses a nuanced view on Chinese FX intervention and bond buying, noting it creates a hostage-like dynamic without a clear directional trade call.

Luke Gromen argues that US dollar dominance is eroding as China's rising trade surplus and control over critical metals undermine the historical foundations of USD hegemony.

Luke Gromen reiterates his long-standing bearish view on the Chinese yuan versus gold, questioning the effectiveness of US strategy to use Iran to pressure China.

The tweet notes a flight-to-safety bid for the USD amid Iran conflict but highlights its ongoing sell-off against the Chinese Yuan, suggesting mixed currency dynamics.

The tweet notes a flight-to-safety bid for the USD amid Iran conflict but highlights its sell-off against the Chinese Yuan, questioning the impact of a U.S.-China agreement.

Brad Setser notes the RMB is appreciating from a low level due to China's closed financial account and exporters selling dollars, but expresses no directional trade view.

Brad Setser suggests that a stronger Chinese yuan (CNY) must be part of any future adjustment, but the tweet is a reply with no explicit forward-looking trade call.

Yuan undervalued, will appreciate.

Brad Setser argues that using a realistic current account surplus, the IMF model suggests a 25-30% yuan undervaluation, while citing Goldman Sachs' call for further strengthening.

Luke Gromen argues that China's lending in USD against commodity collateral is accelerating de-dollarization by shifting commodity pricing and settlement toward the yuan.

AI-linked Asian currencies to outperform.

Luke Gromen argues that China's ability to buy oil in yuan and settle in goods and gold shields it from an FX crisis unlike the 1997 scenario under USD-only pricing.

Brad Setser explains that a shift in CNY appreciation led to increased settlement, implying state accumulation of foreign exchange.

Luke Gromen warns that foreign holders may sell U.S. Treasuries or seek Chinese yuan liquidity, signaling potential stress in UST markets and dollar dominance.

Brad Setser questions whether China wants yuan inflows from oil exporters given existing pressure on the CNY from exporter conversion, suggesting a cautious macro outlook.

Luke Gromen warns that UAE may shift oil transactions to CNY and sell USD assets if denied swap lines, threatening dollar hegemony and energy markets.

Brad Setser notes that low CNY rates could lead to a panda bond issuance, which would not end dollar dominance but signal pressure on global oil flows.

Go long CNY due to its increasing use in global trade settlement, catalyzed by the widespread PBOC swap lines which encourage partner nations to conduct bilateral trade in Chinese currency.

Paul Dobson explicitly stated that the Chinese yuan has already been performing strongly, and people are seeing an opportunity for further gains. With a ceasefire potentially holding, interest rate differentials may shift away from the US dollar, benefiting Asian currencies like the yuan, and increased options buying indicates bullish market sentiment. LONG because market participants are actively looking to buy options for price rises, suggesting upside potential driven by ceasefire stability and economic factors. The ceasefire proves unstable or economic conditions deteriorate, leading to renewed dollar strength or inflation shocks that reverse currency gains.

China's banking system is structurally increasing its net long dollar position, which should provide underlying support for the USD against the CNY.

Go long the Chinese yuan as structural factors (economic recovery, geopolitical resilience) are expected to overpower its usual seasonal weakness in Q2.

The speaker explicitly stated the Singapore dollar and Hong Kong dollar "will always play a safe haven role" and that these two, along with the Chinese yuan, are "the best picks" in Asia, while advising to "stay away from" other Asian currencies. The Iran war is causing risk aversion and high energy prices, which disproportionately hurt Asian economies that are major oil importers. Currencies with safe-haven attributes, tightening biases, or managed stability are expected to outperform. Therefore, a long position on SGD, HKD, and CNY is favored relative to other Asian currencies in the current environment. A swift resolution to the Iran war and a sharp decline in energy prices would reduce risk aversion and the safe-haven premium, diminishing the relative advantage of these currencies.

The Chinese yuan is a favored Asian FX pick because it is seen as more isolated from a strong U.S. dollar driven by this U.S.-centric event. In a risk-off environment with dollar strength, it's better to pick currencies that are less vulnerable to the greenback's momentum. The CNY has been an outperformer. LONG relative to other Asian currencies vulnerable to dollar strength and energy imports. An escalation that severely impacts Chinese energy imports or growth.

The author argues that the Chinese Yuan remains undervalued against the Euro and has not appreciated sufficiently, implying the CNY is likely to strengthen (and EUR/CNY to fall).