Exchange Market Weekly Review: RMB Weak Shocks

This week, the US Treasury issued a semi annual exchange rate report showing that "the renminbi is still undervalued" and said that the RMB exchange rate remained at a low level because of continued intervention in the first quarter of this year. P

This has not affected the trend of the renminbi this week. Experts say that the recent devaluation of the renminbi is mainly caused by the fundamentals of the domestic economy and the withdrawal of quantitative easing by the Federal Reserve.

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< p > 16, the RMB reported a 6.1589 month low price of < a href= "//www.sjfzxm.com/news/index_cj.asp" > US dollar < /a >, a 7 month low.

In the spot market, the RMB runs against the US dollar in the 6.2150-6.2250 range.

Exchange rate risk control center analysts expect the short-term RMB to support the US dollar at 6.23, with resistance at 6.19.

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< p > since the beginning of this year, the depreciation rate of < a href= "//www.sjfzxm.com/news/index_cj.asp" > RMB > /a > nearly 3% has aroused the concern of the United States.

In its half year foreign exchange report, the US Treasury said, "if the recent trend of the RMB exchange rate indicates that China will boycott the appreciation of the currency again, it is worrisome."

In addition, the report has increased pressure on Germany, but has not listed any country as a currency manipulator.

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Zhou Chunsheng, a professor of finance at the Yangtze River Business School, told reporters that the recent devaluation of the renminbi was mainly caused by the fundamentals of the domestic economy, the withdrawal of quantitative easing by the Federal Reserve, and the depreciation of other emerging market currencies, and so on. P

"The Fed gradually withdrew from the QE, triggering a gradual appreciation of the dollar, which led to a relative depreciation of the renminbi."

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Bai Ming, deputy director of the international market research department of the Ministry of Commerce, < /a > International Trade and Economic Cooperation Research Institute, said in an interview with reporters, "P > < a href=" //www.sjfzxm.com/news/index_cj.asp ".

"With the improvement and improvement of the exchange rate, the RMB will expand the daily fluctuation range against the US dollar, which in itself is a way of reducing intervention.

It can be seen that the US side has a great degree of selectivity in determining whether China intervened or not, mainly based on the maximization of the interests of the United States.

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< p > the chief researcher of an Bang consulting Chen Gong also believes that the US move is intended to put pressure on RMB appreciation.

"At present, the Central Bank of China is at a relatively detached position in dealing with the short-term decline in the RMB exchange rate. With the current economic growth in China, huge foreign exchange reserves and future market prospects, the central bank still has confidence in the future of the renminbi, and for short-term exchange rate declines, it will attack its arbitrage."

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< p > looking forward to the future trend of RMB, Zhou Chunsheng judged that the exchange rate of RMB against the US dollar has gradually approached the equilibrium level, although the possibility of breaking through 6 in the future is still there, but the probability of unilateral appreciation is greatly reduced.

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< p > latest data show that as of the end of 3 this year, China's foreign exchange reserves amounted to US $3 trillion and 950 billion, ranking first in the world.

In the context of emerging market capital flight and depreciation of RMB against arbitrage, China's foreign exchange reserves have maintained such a growth momentum, indicating that investors still have confidence in the long-term trend of RMB appreciation.

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In the international foreign exchange market, Yellen, chairman of the Federal Reserve, said that for the US economy, continued low inflation is a more direct threat than price rise, and stressed that the Federal Reserve will implement policy incentives in the coming period. P

Yellen's remarks were not consistent with previous attitudes, making the prospect of the foreign exchange market complicated and confusing.

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< p > on the other hand, US economic data show that the growth rate of industrial production in March is faster than expected, indicating that the driving force for economic growth is growing.

At the same time, the growth of US housing starts has also brought support to the US dollar.

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< p > foreign exchange analyst of Bank of China said that although Fed officials made different statements, they could still see more dollars by virtue of the recovery of the US economy, the reduction of the size of the debt purchase and the increase of interest rates. The US dollar index has strong support at 79.6.

Analysts suggest that investors hold the US fingers long and wait patiently for value-added gains.

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Less than p ago, the four sides of the United States, the European Union, Ukraine and Russia negotiated with the market have achieved relatively positive results, which has eased the situation in Ukraine and reduced the market's risk aversion.

The Quartet issued a joint statement calling for an end to the violent conflict in eastern Ukraine, which gives hope for a peaceful solution to the Ukraine crisis.

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