USD/CNY turns the corner and looks higher to 6.55 in the next months – Danske Bank
Chinese growth is moderating this year suggesting USD/CNY has turned the corner and economists at Danske Bank look for a higher USD/CNY over the next 6-12 months.
The Chinese economy has slowed in early 2021
“We see US recovery strongly and Chinese growth moderating this year. It suggests USD/CNY has turned the corner and we look for a higher USD/CNY over the next 6-12 months. Our forecast is unchanged at 6.55 in 3M and 6.70 in 12M.”
“We look for EUR/CNY to decline from 7.82 to 7.71 in 12M. It compares with the forward market pricing 8.11 in 12M and we thus recommend to hedge CNY payables if you are a EUR based company or investor.”
“The main risk is a weaker USD if inflation takes hold with a Fed that is keeping an accommodative stance. It would push USD/CNY lower.”
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