The RMB exchange rate fell below 6.94. The short-term “breaking 7†probability is not big.
According to the latest data from China Foreign Exchange Trading Center, the median price of the RMB against the US dollar was reported at 6.9409 yuan on October 25, down 52 basis points from the previous trading day. It has been lowered for 3 consecutive days and fell below 6.94 for the first time in the past two years.
Huang Zhilong, director of the Macroeconomic Research Center of Suning Financial Research Institute, told the Securities Daily reporter yesterday that there are two main reasons for the continued decline of the RMB exchange rate: First, the US dollar index is still in a strong stage, especially the US economic data is still relatively strong. The Fed’s interest rate hike is relatively stable, which makes the US dollar still in a strong cycle. Second, the Sino-US monetary policy re-differentiates, and the 10-year bond yield spread between China and the United States has shrunk to 0.4 percentage points. This is the depreciation of the RMB exchange rate. Domestic fundamental factors.
Wang Youxin, a foreign exchange researcher at the Bank of China International Finance Institute, told the Securities Daily yesterday that there are three main reasons for the recent decline in the exchange rate: one is the spread of risk aversion; the other is the continued differentiation of China-US monetary policy; the third is the draft budget of Italy and the EU. The differences have continued to worsen, the euro has weakened and the dollar has strengthened.
Wang Qing, the chief macro analyst of Dongfang Jincheng, said in an interview with the Securities Daily yesterday that the US dollar index is in a strong state of operation recently, which will inevitably exert some depreciation pressure on the RMB exchange rate. At present, the domestic macro economy is still in the medium-to-high-speed growth range. Even if it incorporates trade friction factors, there is no possibility of “stall†in the short term. In the next step, the fine adjustment of the domestic monetary policy to the looser direction will also be reasonable, and the phenomenon of “large flood irrigation†can basically be ruled out. Therefore, the fundamentals do not support the continued sharp depreciation of the RMB.
Regarding the recent trend of the RMB exchange rate, Wang Qing said that if the US dollar index remains strong in the short term, the bilateral exchange rate of the RMB against the US dollar will continue to decline slightly. Considering that the possibility of the US dollar continuing to rise sharply is small, the probability of a “breaking 7†exchange rate in the short term is small.
Wang Youxin said that there are currently factors that support the stability of the exchange rate, as well as factors that are unfavorable to the exchange rate. Exchange rate fluctuations will be significantly higher than before. However, even if there is another short-term decline in the exchange rate in the future, or abnormal fluctuations in cross-border capital flows, the central bank has a wealth of experience and sufficient tools to deal with extreme situations. Therefore, it is necessary to have full confidence in the Chinese economy and the RMB exchange rate.
Huang Zhilong said that at present, the US dollar index is unlikely to break through the previous highs in the later period. At the same time, China's economic tax reduction policy and infrastructure investment policies have gradually landed. The trend of economic stabilization and recovery may reappear in the later period, which will stabilize the RMB exchange rate. Will create good conditions. In the medium term, the possibility of two-way fluctuations in the RMB exchange rate is even greater.
Iron 3 Oxide,Iron Lll Oxide,Ferric Oxide Red,Transparent Iron Oxide
TINOX CHEMIE GMBH , https://www.tinoxglobal.com