The EUR to CNY market bias is currently bearish.
Key drivers include:
- The European Central Bank (ECB) has maintained its interest rates, expressing concerns that a stronger euro could dampen inflation. This creates an unfavorable interest rate differential compared to the control policies of the People's Bank of China, which is cautious but moving towards gradual easing.
- Germany's consumer confidence index will be crucial; improvements may support the euro, but recent geopolitical tensions continue to pose risks.
- The eurozone's projected GDP growth of 1.6%, bolstered by government measures, could provide some support to the euro.
The expected trading range is stable, with minor fluctuations around recent lows.
Upside risks stem from positive economic data from Germany or a shift in ECB policy, whereas downside pressures could arise from renewed geopolitical tensions or poor economic indicators. The ongoing volatility in oil prices could also influence the euro's value, affecting sentiment and trade dynamics.