The central parity of the renminbi rose by 157 points, hitting a new high since February, the dollar continued to languish

　　The central parity of the RMB rose by 157 points, a new high since February! The dollar continues to languish

　　China-Singapore Jingwei Client, August 19, according to data from the China Foreign Exchange Trading Center, on August 19, the central parity of the RMB against the US dollar rose by 157 points to 6.9168, the largest since February 3, 2020, six consecutively Increase in working days.

Source: China Foreign Exchange Trading Center website

　　Reflecting the expectations of international investors, the offshore RMB exchange rate against the U.S. dollar closed at 6.9061 yuan on the 18th, up 266 points from the previous closing price, which continued to hit a new high in more than five months; onshore RMB rose nearly 200 points against the U.S. dollar, now at 6.9215.

　　As the RMB exchange rate rose, the US dollar index hit a new low in more than two years. On the 19th, the US dollar index, which measures the US dollar against six major currencies, fell 0.63% to close at 92.2782. The impact of the Fed's stimulus measures led to a general weakness in the U.S. dollar for the fifth consecutive day and pushed the U.S. stock index to a record high.

　　The U.S. dollar fell for eight consecutive weeks last week, marking the longest weekly decline in 10 years. However, the White House and the Congressional Democrats did not reach an agreement on a new round of epidemic relief plan, which delayed the rebound of the dollar. Market participants believe that it will be a matter of time before this fiscal stimulus is finalized.

　　Reuters reported that although the U.S. dollar is generally regarded as a safe-haven asset in times of crisis, the U.S. dollar has fallen since the Federal Reserve intervened in financial markets during the epidemic to maintain liquidity. The Fed’s plan has pushed risky assets to record highs and reduced demand for safe-haven assets, although economic data paints a bleak picture of the US recovery.

　　Greg Anderson, global head of foreign exchange strategy at BMOCapital Markets, said when talking about the decline in the U.S. dollar, "because of the Federal Reserve, because of all the liquidity injected into the market."

　　Anderson pointed out that the weakening of the U.S. dollar on Tuesday was not the result of any specific data, but because the downward momentum accumulated momentum. "Once the momentum of the dollar becomes entrenched, it's like trying to make an aircraft carrier turn around, it's difficult to do. I think the momentum is deeply ingrained now."

　　Tan Yaling, an independent economist at the China Institute of Foreign Exchange Investment, pointed out that the recent increase in the expectation of RMB appreciation is mainly due to the effect of the depreciation of the US dollar. The pros and cons for stabilizing foreign trade and foreign investment under the influence of the epidemic are uncertain, which can easily cause controversy and contradictions about RMB expectations.

　　Tan Yaling said that in the face of RMB appreciation, there are three risk points worth noting. One is inflation risk. The second is that China must be wary of bubbles arising from the transition from surplus to deficit, and from devaluation to appreciation of the currency. The third is to be alert to the loss of assets due to spreads to hedge arbitrage.

　　Looking ahead, the CITIC Futures foreign exchange research team believes that the US dollar may have a technical rebound in the short term, and the driving force is mainly the correction of risk appetite. The current market has already given a high premium to the US economic recovery. Considering that as the subsidy factor gradually weakens consumption, if the US economy does not perform as expected, it may trigger a market correction.

　　Shen Wanhongyuan believes that the central bank issued the "Renminbi Internationalization Report" and the RMB is expected to continue to appreciate during the year. In 2019, the scale of international use of the renminbi is still expanding steadily. Although the renminbi exchange rate has experienced a “break through 7”, the central bank has adopted counter-cyclical factors, issuance of offshore central bills, and other methods and expectations for stabilizing the exchange rate, the renminbi exchange rate is still resilient. It is expected that the RMB exchange rate against the US dollar will rebound by the end of the year driven by the strong trade balance, but the uncertainty of the external environment will weaken the rebound. It is expected to rise slightly to around 6.8-6.9 by the end of the year, and the annual foreign exchange reserves are expected to increase slightly by US$90 billion. about. (Zhongxin Jingwei APP)