USD/CNY: short-term stabilization expected — Danske Bank

FXStreet — Allan von Mehren, chief analyst at Danske Bank, expects the short-term consolidation.

Important Quotes

In our forecasts, we leave it unchanged. So we expect in the short term, a period of stabilization, but in the medium and long term is likely to depreciate the currency pair marginal.

China still faces important challenges with (a) increasing financial risks, (b) excess capacity and (c) a strong dependence of fixed capital investment.

Therefore, we believe that this will maintain the downward pressure on medium-term growth prospects in an upright position. We also see a risk of a trade war with the United States of America, which would weigh on Chinese exports. Against the Euro, we expect that the CNY by more than 10 percent on a 12-month view to depreciate.

** FXStreet News Editorial, FXStreet**

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