Allan von Mehren, Chief Analyst at Danske Bank, expects the Chinese Yuan to depreciate further towards the 7.20 area in 12 months.
Key Quotes
“The weakening of the CNY has been sharper than expected, as policy easing has moved quickly in China. We revise our forecast to look for further weakening of the USD/CNY on a further divergence in monetary policy in the US and China”.
“We now look for USD/CNY at 6.90 (previously 6.60) in 3M and 7.20 (previously 6.70) in 12M”.
“We continue to recommend hedging of receivables as we look for more CNY weakening than forward markets”.
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