SHANGHAI, June 14 (Reuters) - Global investment houses
have rushed to downgrade forecasts for the Chinese yuan after it
weakened past the closely watched 7 per dollar level, pressured
by widening yield differentials with the United States and signs
that Beijing is ready to roll out more stimulus to support a
bumpy post-COVID economic recovery.
    The yuan has lost nearly 4% to the dollar so far
this year, making it one of the worst performing Asian
currencies. It last traded at 7.1643 per dollar on Wednesday.
     
Here is a summary of some forecasts for the Chinese currency:
    
 END-2023 FORECASTS                        
 INVESTMENT HOUSE   NEW           OLD
 Credit Agricole            6.95       6.75
 Goldman Sachs      7.0 (in six         6.7
                    months)       
 J.P.Morgan                 7.25       6.85
 Maybank                    6.95       6.65
 Mizuho Bank                 6.9        6.7
 Morgan Stanley              7.1       6.65
 RBC Capital                7.15        6.6
 Markets                          
 Societe Generale            7.3        6.9
 UBS                       6.9-7        6.8
 

KEY COMMENTS:
    
** CREDIT AGRICOLE
    "From a current account perspective, we see the dynamics as
still lesssupportive than before. The renewed widening of the
services deficit and also capital account outflows is driving
more foreign currency demand onshore."
    "Despite the rise in the trade surplus, the foreign-related
balance onshore has declined suggesting a shift away to RMB
trade but also more foreign currency being withheld. In the
current context though, corporates refraining from selling
foreign currency does not favour CNY appreciation. While this
can be positive for the CNY once CNY expectations shift, that is
not playing a role at this time. 
    
** J.P. MORGAN
    "Looking ahead, CNY FX is set to remain pressured by
structurally negative carry that handicaps CNY supportive flows
including foreign portfolio investment (FPI) bond inflows and
corporate USD selling."
    "The People's Bank of China's (PBOC) tolerance of currency
weakness in the absence of speculative froth also opens up room
for further CNY weakness, with seasonal dividend payout flows an
added bearish factor over the short run."
    
** RBC CAPITAL MARKETS
    "The PBOC has also shown tolerance in USD/CNY’s rise through
the key 7.0 level this time, which may indicate a shift towards
accepting controlled currency depreciation to help support the
economy. The trade-weighted CFETS Index remains well above its
pandemic-driven 2020 lows, and there is both fundamental
justification and room for further depreciation."
    
** GOLDMAN SACHS
    "We expect the goods trade surplus to narrow in the next few
months from the current elevated level, though FX conversion
ratio for goods trade surplus has been low in recent months at
the same time as the services deficit may expand on the back of
re-opening international travel."
    
** UBS
    "UBS's U.S. economics team recently revised its Fed fund
rate projection, now expecting 25 basis points (bps) rate cut
within the year in December meeting vs. its previous expectation
of a 100 bps cut within the year starting from September."
    "Thus, the yield spread might not narrow as much as we
expected. Furthermore, China's growth recovery has been weaker
than expected so far. This may be dragging short term portfolio
inflows."
    
    

 (Reporting by Winni Zhou and Tom Westbrook; Editing by Kim
Coghill)