Chief Analyst at Danske Bank Allan von Mehren expects the pair to attempt some consolidation in the near term.
“We keep our forecasts unchanged and look for stability short term but a gradual trend of weakening in the medium and long term”.
“China continues to face challenges with (a) rising financial risks, (b) overcapacity and (c) too much dependence on fixed investments”.
“We expect this to keep downward pressure on medium-term growth. We also see a risk of a trade war with the US, which would hurt Chinese exports. Against the EUR, we still expect the CNY to depreciate by around 10% on a 12-month horizon”.