USD/CNY could reach 7.00 in 3-month – Danske Bank

Chief Analyst at Danske Bank Jens Sorensen believes USD/CNY could climb to the 7.00 area in the near term.

Key Quotes

“The Chinese yuan has weakened considerably over the past few days against the US dollar, after the People's Bank of China set a weaker midpoint for the tenth consecutive day in the face of a firm US dollar”.

“In the spot market, USD/CNY was trading at 6.8750, remaining near eight-year highs. The yuan has depreciated by 5.4% against the US dollar so far this year. The move reflects USD strength more than CNY weakness, as the USD has appreciated against most currencies. The CNY has moved broadly sideways versus the EUR in the past months”.

“To reflect the view of a stronger USD, we have revised our USD/CNY forecast higher to 7.0 in 3M (6.75), 7.1 in 6M (6.85) and 7.3 in 12M (7.1)”.