Activation of Chinese Stock Market Due to Yuan Appreciation
[Asia Economy Reporter Kwon Jae-hee] Global investment bank Goldman Sachs has forecast that the Chinese yuan will appreciate to 6.5 yuan per dollar within the next year in onshore trading.
Timothy Moe, Goldman Sachs' Asia Pacific Chief Equity Strategist, appeared on CNBC on the 17th (local time) and stated, "We have revised the yuan's exchange rate forecast for the next year from 6.7 yuan per dollar to 6.5 yuan per dollar."
An appreciation of the yuan means that the value of the yuan increases relative to the dollar.
He cited the basis for this forecast as the dollar entering a 'structural weakening period' after showing strength over the past several years.
This week, the yuan showed strength in both onshore and offshore Chinese markets, trading below 6.8 yuan per dollar.
Strategist Timothy Moe said, "Historical evidence shows that currency appreciation generally boosts the stock market," and predicted that the yuan's strength will be a positive factor for the Chinese stock market.
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