Yuan and Yen Outlook for 2014 Challenge Consensus
A strengthening Chinese yuan and weakening Japanese yen mean Asia’s two major currencies face sharply contrasting fortunes in 2014.
China’s yuan is set for a strong year. The currency ended 2013 at 6.05 to the dollar, increasing 2.9 percent annually. In 2014, the yuan will rise to 5.98 by the end of the year, according to the median forecast of economists in a Bloomberg survey. This estimate may be too modest. Because of China’s widening trade surplus and continued capital inflows, the currency could grow stronger substantially. Even a repeat of 2013’s 2.9 percent gain would see it end the year at 5.88 to the dollar.
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