21.06.201611:02:00UTC+00Chinese Exports to Get a Lift from Weaker Currency

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.