HSBC's year-end forecast for USD/RMB.....>

CHINA YUAN: HSBC's year-end forecast for USD/RMB is RMB6.70, they "take into

account the mildly negative impact that currently imposed trade tariffs would

have on China's growth and yield advantage, as well as the PBoC's likely

measures to 'lean against the wind'. However, the risk of an even weaker RMB

exists, considering the US's latest proposal to potentially impose punitive

tariffs (be it 10% or 25%) on an additional USD200bn of imports from China. HSBC

Economics estimates that more of such tariff actions could lead to a 0.4 ppt

impact on growth, compared to 0.1 ppt currently. In that case, a further

effective loosening of financial conditions may be needed (although fiscal

policy will still do the heavy lifting, resulting in an even narrower China-US

yield advantage and, as such, a higher USD-RMB rate."