CNY expected to pick up pace in the longer run – Danske Bank

Allan von Mehren, Chief Analyst at Danske Bank, now sees the pair grinding lower to the 6.20 region within a year’s view.

Key Quotes

“The continued strong correlation with the overall USD development has continued to dominate developments in USD/CNY and a move in relative rates in favour of the USD has not been able to break this correlation. We thus put more weight on the correlation with the USD. As we forecast a further decline in the trade weighted USD we also see a move lower in USD/CNY to 6.20 in 12M. The forecast is unchanged from the February update”.

“Our forecast for EUR/CNY is for a move towards 7.94 in 12M (forward is 8.22) from the current level of 7.82”.