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20 Apr 2015
USD/CNY further downside lies ahead – Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Flemming Nielsen sees the pair grinding lower in the medium term.
Key Quotes
“It is still our view that China will not allow the CNY to depreciate substantially despite data suggesting that growth continued to slow in early 2015”.
“In our view, CNY remains well supported by an increasing trade balance surplus in the wake of a sharp decline in import prices and China’s relatively closed capital account, which limits capital outflow”.
“China’s ambition to have CNY included in the SDR later in 2015 also suggests that China will probably not rock the boat ahead of a decision”.
“We still expect a moderate depreciation of CNY within the current trading band and we have revised our forecasts for USD/CNY lower for 1M and 3M in light of faster than expected appreciation of the CNY over the past month”.
Key Quotes
“It is still our view that China will not allow the CNY to depreciate substantially despite data suggesting that growth continued to slow in early 2015”.
“In our view, CNY remains well supported by an increasing trade balance surplus in the wake of a sharp decline in import prices and China’s relatively closed capital account, which limits capital outflow”.
“China’s ambition to have CNY included in the SDR later in 2015 also suggests that China will probably not rock the boat ahead of a decision”.
“We still expect a moderate depreciation of CNY within the current trading band and we have revised our forecasts for USD/CNY lower for 1M and 3M in light of faster than expected appreciation of the CNY over the past month”.