Yuan To Face Short Term Pressure From Fed Hikes - Yicai

The yuan may endure short-term depreciation pressure as the Federal Reserve continue to hike rates, while China's weak exports, Covid disruptions and real estate downturn also weigh on the currency, Yicai.com reported citing analysts. Nomura foreign exchange strategist Craig Chan maintained his forecast for yuan to weaken to 7.5 against the U.S. dollar by the end of November, rather than forecasting additional weakness as he suspects the People's Bank of China may intervene. Though the State Administration of Foreign Exchange is unlikely to use FX reserves to intervene, state-owned commercial banks may enter the market to support the yuan with their large foreign exchange holdings estimated to total USD629 billion, the newspaper said citing Lu Ting, chief economist at Nomura China.