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Yuan Undervalued: Goldman Sachs Sees Major Shift

13 Oct

Summary

Goldman Sachs estimates the yuan is undervalued by 20% to 25%.
A stronger yuan is considered an underpriced scenario in FX markets.
The global foreign exchange market is valued at $9.5 trillion daily.

Yuan Undervalued: Goldman Sachs Sees Major Shift

Goldman Sachs Group Inc. has identified the Chinese yuan as significantly undervalued, with estimates suggesting it is 20% to 25% below its fair market value. According to Kamakshya Trivedi, the bank's global head of foreign exchange, rates, and emerging market strategy, a strengthening yuan represents an underpriced scenario within the global foreign exchange market.

This expansive market operates with a daily volume of $9.5 trillion, highlighting the potential magnitude of any shifts in currency valuations. The bank's assessment points towards a notable revaluation opportunity for China's currency, indicating that current market pricing does not fully reflect its underlying strength or potential.

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