Yuan May Hit Five Per Dollar on Carry-Trade Exit, Macquarie Says

Macquarie says China’s onshore yuan could strengthen as much as 5 per dollar if domestic firms unwind a large buildup of U.S. dollar holdings, implying a sharp reversal in capital flows. The note points to positioning and flow dynamics rather than a policy change or macro data surprise. The setup is relevant for FX and broader emerging markets, but the article is a forecast rather than an immediate market event.

Analysis

Macquarie says China’s onshore yuan could strengthen as much as 5 per dollar if domestic firms unwind a large buildup of U.S. dollar holdings, implying a sharp reversal in capital flows. The note points to positioning and flow dynamics rather than a policy change or macro data surprise. The setup is relevant for FX and broader emerging markets, but the article is a forecast rather than an immediate market event.