# China’s COVID-19 Situation and Possible BoJ’s Policy Tweak to Shape FX Trend in January: Kenanga

> Kenanga Research's FX outlook forecasts a bearish yuan for January 2023, citing a 2022 depreciation of more than 8% against the dollar. Beijing's rollback of zero-COVID curbs and seasonal dollar weakness lifted the yuan 2.7% in December. Analysts expect it to slide back toward 6.90-7.00 per dollar as manufacturing PMI contracts and infections surge.

- Date: 2023-01-03 · published 2023-01-03T12:00:00.000Z
- Category: macro · region China · magnitude low
- Page: https://feedsoft.ai/events/12762-china-s-covid-19-situation-and-possible-boj-s-policy-tweak-to-shape-fx-trend-in
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md)

## Why it matters

A weaker yuan makes Chinese exports more competitive, which can weigh on China's import demand for feed ingredients priced in dollars. The forecast implies a higher USD/CNY rate.

## Read by commodity

- USDCNY: bullish ▲

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDCNY | 2018-01-11 | [One way or another: China's yuan policy tweak a warning shot in old battle](https://feedsoft.ai/events/67196-one-way-or-another-china-s-yuan-policy-tweak-a-warning-shot-in-old-battle.md) | -1.4% | -2.8% |
| USDCNY | 2022-09-26 | [China Lets Its Currency Weaken Past a Key Barrier and Tries to Manage the Fall](https://feedsoft.ai/events/7211-china-lets-its-currency-weaken-past-a-key-barrier-and-tries-to-manage-the-fall.md) | -0.2% | +1.9% |
| USDCNY | 2018-10-30 | [Yuan's slide to decade low puts China in tricky position - Nikkei Asia](https://feedsoft.ai/events/62765-yuan-s-slide-to-decade-low-puts-china-in-tricky-position-nikkei-asia.md) | -0.5% | -0.1% |
| USDCNY | 2022-05-03 | [China \| RMB exchange rate sharp depreciation amid diverging monetary policy \| BBVA Research](https://feedsoft.ai/events/8313-china-rmb-exchange-rate-sharp-depreciation-amid-diverging-monetary-policy-bbva.md) | +1.8% | +1.0% |
| USDCNY | 2023-06-13 | [China cuts key policy rate as post-Covid recovery fizzles; yuan hits 6-month low](https://feedsoft.ai/events/35715-china-cuts-key-policy-rate-as-post-covid-recovery-fizzles-yuan-hits-6-month-low.md) | +0.5% | +0.3% |

## Sources

- businesstoday.com.my: https://www.businesstoday.com.my/2023/01/03/chinas-covid-19-situation-and-possible-bojs-policy-tweak-to-shape-fx-trend-in-january-kenanga/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.