8 Jan 2016
CNY faces further pullbacks – Danske Bank
FXStreet (Edinburgh) - Analysts at Danske Bank have suggested the Chinese currency remains poised for further weakness in the next periods.
Key Quotes
“The CNY has weakened considerably against the USD over the past month and the move accelerated this week. It followed equity turmoil and confusion over a fixing by the People’s Bank of China (PBoC) that was weaker than its new regime should warrant”.
“We have revised higher our USD/CNY forecast, looking for a bigger weakening of the CNY over the next year to 7.0 versus the USD – a further depreciation of 7% over 12 months. We look for a weakening against the EUR of around 15% over the next year”.
“We continue to recommend corporates hedge receivables in CNY via the CNH market. The CNH-CNY spread should narrow in 12M from very wide levels”.
Key Quotes
“The CNY has weakened considerably against the USD over the past month and the move accelerated this week. It followed equity turmoil and confusion over a fixing by the People’s Bank of China (PBoC) that was weaker than its new regime should warrant”.
“We have revised higher our USD/CNY forecast, looking for a bigger weakening of the CNY over the next year to 7.0 versus the USD – a further depreciation of 7% over 12 months. We look for a weakening against the EUR of around 15% over the next year”.
“We continue to recommend corporates hedge receivables in CNY via the CNH market. The CNH-CNY spread should narrow in 12M from very wide levels”.