Further depreciation seen in CNY – Danske Bank

By FXStreet FXStreet (Edinburgh) – Allan von Mehren, Chief Analyst at Danske Bank, believes the Chinese currency has still further room to the downside.

Key Quotes

“Given the divergence in monetary policy and the fact that CNY is more market based, we look for a depreciation of the CNY of 4-5% over the next 12 months”.

“The IMF Managing Director Christine Lagarde have stated that she supports the staff’s proposal to include CNY in SDR. The official announcement is due 30 November 2015”.

“After that we expect a gradual weakening of the CNY. We do not expect a sharp devaluation, though, as this would backfire through significant capital outflows and deterioration in global sentiment”.
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Source:: FX Street