Chinese exports to get a lift from weaker currency
Source: FxWire Pro - Commentary / 21 Jun 2016 11:02:12 America/New_York
In the early spring months, China showed signs of a cyclical rebound driven a turn in construction spending, pick-up in infrastructure projects and a tentative improvement in exports.
Exports are a source of gradual improvement and a weaker currency is supporting Chinese exports. The currency has turned from a sharp headwind in the first half of 2015 to a tailwind following the recent depreciation of the trade-weighted CNY. Also, a gradual recovery in the US is likely to improve foreign demand.
“We look for CNY to continue to weaken on a trade-weighted basis over the next 12 months with USD/CNY hitting 6.85 on 12M (currently 6.60) and EUR/CNY climbing to 8.08 (currently 7.42),” said Danske Bank in a report.© FxWire Pro 2020. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.