Goldman Sachs Research revises its CNY forecasts higher.

"On the currency front, a combination of moderate nominal currency appreciation and renewed domestic inflation has resulted in a real appreciation, but that still leaves the CNY more than 20% undervalued versus the Dollar on a weighted average of our two valuation models, and at some of the cheapest levels on a real-trade-weighted basis over the past couple of decades. The strength in recent fixing behaviour and the gradual drift up in exporter conversion ratios suggests to us that a gradual but sustained move is still the right baseline," GS notes.

"Therefore, given the passage of time, we are now rolling forward our year-end target of 6.70 for USD/CNY, and extending Renminbi strength further. Our new forecasts for USD/CNY are 6.80, 6.70 and 6.50 in 3, 6, and 12 months (compared to 6.85, 6.80 and 6.70 previously), with our new 12 month forecast notably stronger than consensus and forward," GS adds.