MUFG analysts Lin Li and Khang Sek Lee note that July data point to weaker Chinese growth and a widening divergence between the “new” and “traditional” economy. Despite short-term production disruptions from Middle East risks and extreme weather, they highlight persistently weak demand and the need for more policy stimulus. MUFG maintains its forecast for USD/CNY to reach 6.65 by end-2026.
MUFG keeps 2026 Yuan forecast
“July data indicates a slowdown in aggregate economic momentum, with growth decline seen in IP, retail sales, FAI and main property activity indicators.”
“While factors, like the renewed risk of conflict in the Middle East, and…
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