FXStreet (Edinburgh) – Senior Analyst at Danske Bank Flemming Nielsen expects CNY to hold its ground against the backdrop of increasing pressures for a weaker currency.
Key Quotes
“It is still our view that China will not allow CNY to depreciate substantially despite data suggesting that growth continued to slow in early 2015”.
“In our view, CNY remains well supported by an increasing trade balance surplus in the wake of a sharp decline in import prices and China’s relatively closed capital account, which limits capital outflow”.
“China’s ambition to have CNY included in the SDR later in 2015 also suggests that it will behave like a responsible stakeholder ahead of the IMF decision this autumn”.
“We do not expect the daily trading band to be widened until after the IMF decision”.
“We still expect a moderate appreciation of CNY within the current trading band but a generally stronger USD limits the appreciation potential in the short run”.
(Market News Provided by FXstreet)