China News Service, Beijing, October 21 (Reporter Xia Bin) China Foreign Exchange Trading Center reported on the 21st that the central parity of the RMB against the US dollar was 6.6781, setting a new high in more than two years since July 16, 2018, compared to the previous trading day An increase of 149 basis points has achieved five consecutive trading days' rise.
On the foreign exchange market that day, the onshore and offshore RMB spot exchange rates against the US dollar both hit new highs. As of 12:00 on the 21st, the former hit 6.6543, the latter reached 6.6385, and the US dollar index fell to its lowest level in more than a month. Value, reaching 92.89.
Zhao Yaoting, a global market strategist for Invesco Asia Pacific (except Japan), believes that the current market’s rising expectations for the renminbi are mainly due to three factors. One is the market’s expectations for the easing of Sino-US relations, and the other is the continued increase in global capital. RMB assets, third, compared with the resurgence of the epidemic in Europe and the United States, China's economy has taken the lead in realizing recovery, which has improved the risk-hedging properties of RMB assets.
CITIC Securities analysts clearly believe that, as far as the current trend is concerned, the trend of the renminbi is mainly affected by the mutual forces between China and the United States, including the balance of payments perspective, the performance of the US fundamentals, the mid-term weakness under the US dollar cycle, and the US election. Political disturbances, the trend of the renminbi may show an overall strong characteristic.
Obviously, from a long-term perspective, on the one hand, if the US economy gradually recovers and resumes, the RMB exchange rate will still be under certain pressure.
On the other hand, from the perspective of the “dual cycle”, the current account and capital account still need to maintain an overall balance. The excessive strength of the RMB may bring pressure on the current account to a certain extent. Therefore, in the long run, the RMB exchange rate may not Excessive strength.