USD/CNY seen at 6.20 in 12-month – Danske Bank

Allan von Mehren, Chief Analyst at Danske Bank, revised higher the outlook for the Chinese Yuan within a year’s view.

Key Quotes

“The continued strong correlation with the overall USD development has continued to dominate the development 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 now. Our expectation of a further decline in the trade-weighted USD has therefore led us to revise our 12M forecast down to 6.20 – a change from our previous forecast of 6.70”.

“It also means we no longer look for a further depreciation of the CNY versus EUR. Our 12M EUR/CNY forecast is now 7.94 versus a forward rate of 8.26”.