USD/CNY to see a moderate rise on a 12M horizon towards 7.40 – Danske Bank

USD/CNY has declined lately generally following the swings in the Dollar. Economists at Danske Bank analyze the pair’s outlook.

EUR/CNY to revert lower towards 7.70 in 12M shadowing EUR/USD lower

We keep our view of a moderate rise in USD/CNY on a 12M horizon towards 7.40 as we expect economic and financial risks in China to prevail for some time underpinning some further CNY weakness. Our view of a stronger USD in the medium to longer term also points to a higher USD/CNY. However, in the short term, we expect the cross to stay close to current levels around 7.15. 

For EUR/CNY we look for the cross to follow EUR/USD slightly higher in the short term but to revert lower towards 7.70 in 12M shadowing EUR/USD lower. The two crosses still trade with a high correlation.