The Renminbi Is Not Afraid Of The US Dollar.

Since mid July, due to the steady recovery of the US economy and the anticipated increase in the rate of advance interest rates raised by the Fed, the US dollar has maintained a strong momentum in the world's major currencies, but it has been overshadowed by the renminbi.

Why RMB rise

Yesterday (September 29th), the China Foreign Exchange Trading Center released data show that the U.S. dollar to the central parity price of the yuan reported 6.1539, an increase of 31 points from the previous day.

In June 2010, the central bank restarted the exchange rate system reform. In January this year, the RMB exchange rate against the US dollar increased by nearly 12%, reaching the highest level in the past 20 years.

Over the next 4 months, the RMB entered the devaluation channel, and the RMB depreciated to the US dollar by more than 3%. It touched $1 and exchanged 6.26 yuan, the lowest level since the end of 2012.

But since June, the RMB exchange rate has begun to callback, and the dollar has shown great resilience since the strong dollar in July.

The research report released by the International Finance Research Institute of Bank of China (601988, stock bar) pointed out that "the larger fluctuation of the renminbi may become a norm in the future, indicating that the RMB exchange rate has entered a new stage".

The report holds that the fluctuation of the RMB exchange rate has become the main force of the market players, and international capital has become the key disturbance factor.

The two-way fluctuation of RMB exchange rate will become the norm in the future.

For the current round of RMB

The main reason for the rise is that China's trade surplus is the main reason for the pressure on the renminbi to face further appreciation.

In the wake of the revival of exports, the renminbi has seen a surge in sentiment. At the same time, global liquidity easing and capital reflux have provided support for the RMB exchange rate in the short term.

In September 8th, China's customs data released showed that China's trade surplus in August was another month's record high, and the annual export growth rate was better than expected.

Data show that in August

US $208 billion 460 million, imports of US $158 billion 630 million, exports grew by 9.4% over the same period last year, imports fell by 2.4% compared to the same period last year, the trade surplus was US $49 billion 840 million, and the expansion rate was 77.8%. It has set a record high of US $47 billion 300 million in July.

Strong trade data led to a 187 basis point rise in the central parity of the RMB exchange rate in the second day (September 9th) after the announcement of the data.

"The second consecutive month of decline in imports is mainly due to lower commodity prices.

Iron ore imports increased by 17% from 1 to August, while the average price of the same period fell by 17%, and the import of major commodities remained strong, meaning domestic demand had not yet fallen. "CBA AndyJi strategist Andy said:" export growth and trade surplus are better than expected, which offset the rise in us dollar and RMB appreciation. "

In addition, since the end of July, the domestic A share market has continued to rebound, making China attractive to international capital in the short and medium term.

At the same time, the industry generally believe that the A shares "maverick" performance will continue in October.

"A series of important events in October may have a positive positive effect on the A share market.

The convening of the fourth plenary session will surely boost market confidence, and the deepening of reform will further release the dividend of the system.

The opening of Shanghai and Hong Kong links is also a landmark event for China's stock market, and the valuation of blue chips is highly expected.

Insiders say.

In its report, Bank of China points out that the continued expansion of the trade surplus in August may have some pressure on the renminbi to appreciate.

But at the same time, the prospects for global economic recovery are uncertain, the Fed's rate hike is uncertain, and the downward pressure on domestic economy is still large. This has added uncertainty to the RMB exchange rate trend. The further appreciation of the RMB exchange rate will also be limited. Its maintenance of two-way volatility is the future trend of the RMB exchange rate.

Although the RMB exchange rate has been rising for nearly 4 months, the market is cautious about the future trend of RMB.

Analysts pointed out that in August, PMI index and import data both showed that domestic economic growth was still weak, and the support of Fundamentals for the RMB remained to be observed. It is expected that exports will only be mildly improved in the future.

Meanwhile, the decline in domestic real estate market has led to the sluggish domestic demand, coupled with the continued appreciation of the US dollar in the next few months.

As the US economy continues to grow stronger and is ahead of most developed economies such as Europe, inflation in the United States has steadily increased in recent months, and the US dollar index is expected to show stronger medium-term strength. Under this background, the further appreciation of the RMB exchange rate will also be limited, and two-way volatility will remain the basic trend.

Yang Yuting, a senior economist at ANZBank, thinks that the rise of the renminbi to 6.1 level will be faced with obvious resistance. It is unlikely that the yuan will have a level of 6.0539 against the US dollar by the end of last year.

"At the end of this year, the RMB will reach the 6.13 level against the US dollar, and the RMB will have to break through the 6.05 level and wait until the fourth quarter of next year," he said.

Bloomberg securities brokers released a forecast.