UBS has revised its outlook for the Chinese yuan, forecasting that the currency will climb roughly 3% against the U.S. dollar over the next year.
The Swiss lender now expects the USD/CNY exchange rate to settle at around 6.95 within 12 months, marking a clear strengthening from current trading levels. The projection follows news that Washington and Beijing have extended their tariff truce until early November, easing immediate trade tensions.
According to UBS analysts, upcoming policy measures aimed at supporting China’s cooling economy could also lend additional resilience to the yuan. The bank added that it sees further upside in Chinese tech shares, citing healthier fundamentals and solid market liquidity.
On the U.S. side, comments from Federal Reserve Chair Jerome Powell at Jackson Hole struck a dovish tone, reinforcing expectations that the Fed will deliver a rate cut in September. UBS noted that this policy direction matches broader market consensus for monetary easing in the months ahead.
In this environment, the bank suggested investors consider high-quality bonds as a way to secure steady income while positioning for shifts in both interest rates and currency valuations.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.