USD/CNH will hit 7.60 in a year, according to Danske Bank

Danske Bank economists anticipate more gains for the USD/CNH and EUR/CNH due to their weaker GDP growth projections for China.

USD/CNH will continue to rise.

Financial strain is on the rise, bringing up the question of whether China is about to enter a more serious financial and economic catastrophe once more. Although there is a growing chance that this will happen (with a 25% probability), our base case continues to be that China has the means to prevent it and will do so to the fullest. We have nevertheless lowered our prediction downward to 4.8% growth this year and 4.2% in 2024 due to recent bad statistics and an increase in financial stress.

In light of the revised poorer economic prognosis and escalating uncertainties, we have increased our forecasts for the USD/CNH and EUR/CNH exchange rates. From 7.40 before, we now predict that the USD/CNH will reach 7.60 in 12M.