The renminbi is likely to strengthen 3 percent against the US dollar in 2014 as the central government steps up currency reform, Bank of East Asia Ltd. (BEA) (00023.HK) said.
The Chinese unit is expected to break 6 yuan per US dollar and “may test 5.88″, Kenix Lai, a senior analyst in the bank’s currency and interest rate trading department, told an economic and market forum Monday in Hong Kong.
“At the same time, the US dollar may strengthen due to the winding down of quantitative easing,” she said. The trading band may expand to 2 percent to 2.5 percent in the middle of the year with a stronger greenback helping ease renminbi appreciation.
Lai expects the United States Federal Reserve, the Reserve Bank of New Zealand and the Bank of England to maintain a tightening monetary policy.
Bank of Japan, the Reserve Bank of Australia, the European Central Bank and Bank of Canada may opt for a loosening stance, Lai said.
BEA deputy chief executive Adrian Li is optimistic about the global economic outlook thanks to recovery in the US and Europe and a stabilizing Chinese economy.
Japan is expected to continue its economic stimulus program, Li said. However, uncertainty remains over the future trend of asset values in the global market.
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