In response to the U.S. tariff imposed on Chinese goods this week, the mid-price of the renminbi of the People's Bank of China hit an 11 and a half-year low against the dollar.
Before that, the decision of the People's Bank of China last month to let the renminbi break through seven makes it even more anticipated that the Sino-US trade war will last for a long time.
The latest Reuters survey of nearly 60 strategists from August 29 to September 4 shows that the renminbi is expected to reach 7.19 against the dollar in six months, more than 0.5% lower than Wednesday's 7.15, and 7.16 in one year.
This is the third consecutive month for analysts to cut the RMB exchange rate outlook.
"For the exchange market, last month's sharp fall in the yuan triggered by tariffs was far more important than if China were still a minor player in global trade," said Kit Juckes, currency strategist at Societe Generale Bank in London. He can get the weak dollar he longs for.
Nearly two-thirds of the analysts who answered an additional question said that China would fight a trade war with the United States by further depreciation of the yuan.
"There is a risk that the United States will retaliate against the devaluation of the RMB or the decline of other currencies as a result of the devaluation of the RMB. More tariff measures are likely to keep the renminbi down, and Trump is more likely to react to them, thereby knocking down dominoes, "Juckes said.
The most pessimistic view of the RMB exchange rate after 12 months is 7.75, which is the weakest level since the survey began more than a decade ago, suggesting that the trend of the RMB will obviously continue downward.
Although the devaluation of the RMB is beneficial to China, the world's largest exporter of manufactured goods, the effect of the devaluation of the RMB may be limited in mitigating the impact of the US tax on Chinese imports to the United States.
Hot Model No.: