Research China: Green shoots meet trade war – Danske Bank

FXStreet Insights Team FXStreet

The Chinese economy saw green shoots in Q1, but the trade war created a new headwind in April, Danske Bank's FX analysts report.

China’s Q1 recovery faces new trade war headwinds

"Still, we leave our growth outlook unchanged as our medium-term scenario for the trade war remains the same with an end game of 40% tariffs on Chinese goods following a long bumpy road of trade talks. Stimulus was pushed forward as expected to counteract tariff effect. We continue to see growth at 4.7% in 2025 and 4.8% in 2026."

"Over the coming months we expect a pick-up in activity due to front loading of exports during the 90-day trade truce but see activity moderating again after that. Housing and private consumption have improved but lots of work remain to get the two sectors on stronger footing. A growing number of tech milestones have boosted confidence."

"The US-China rivalry is set to continue. US tech sanctions keep widening while China retaliates with limits on rare earth exports. Trump's America First policy has led to a thaw in EU-China relations. Tensions remain, though, when it comes to China's rise as a competitor, industrial policy, overcapacity, and China's position on the Ukraine war."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD turns higher toward 1.1700 ahead of key US CPI data

EUR/USD erases losses and turns north toward 1.1700 in the European session on Tuesday. The pair draws support from renewed US Dollar struggle, as traders turn cautious ahead of the US CPI inflation data, due later in the day at 13:30 GMT.

GBP/USD rises toward 1.3500 as traders await US CPI report

GBP/USD picks up fresh bids and rises toward 1.3500 in European trading on Tuesday. Traders now await the US CPI data release for fresh direction on the US Dollar, which will significantly impact the pair's performance ahead.

Gold extends the range play below $4,600 and record high as traders await US CPI report

Gold remains on the defensive below the $4,600 mark through the first half of the European session though it remains close to the all-time peak, touched the previous day, amid a supportive fundamental backdrop. The US Dollar gains some positive traction following the previous day's decline and turns out to be a key factor acting as a headwind for the commodity.

CPI Data expected to show stable inflation in December with limited implications for Fed policy

The US Bureau of Labor Statistics will publish December’s Consumer Price Index report on Tuesday at 13:30 GMT. The report is expected to show that prices remained broadly stable in the last month of 2025. It’s a key read on inflation and could stir some short-term moves in the US Dollar.

More pressure on the Federal Reserve emerges

News broke on Sunday night that the Federal Reserve received grand jury subpoenas from the Department of Justice on Friday, escalating the Trump administration's pressure on the nation's central bank.

Meme Coins Price Prediction: DOGE, SHIB, and PEPE bulls struggle to regain strength

Meme coins, including Dogecoin, Shiba Inu, and Pepe remain under extreme selling pressure, recording roughly seven days of downtrend following the January 4 spike. The meme coins risk a bearish shift in momentum as buying pressure subsides, potentially leading to further declines.