RMB Against The US Dollar Hit A 10 Month High In The Middle Price.

In December 15th, the spot price of the RMB against the US dollar continued to deviate from the middle price, while the intermediate price refreshed for nearly 10 months, while the spot price hit a closing low of 4 and a half months.

Market participants said that the increase of seasonal factors in the end of the year in addition to the demand for foreign exchange purchase in the recent oil market makes the RMB market price still weak in the short term. However, the middle price remains stable and strong, which is conducive to stabilizing market expectations and restricting the devaluation of RMB.

According to the foreign exchange trading center, the RMB exchange rate between the RMB and the US dollar was reported at 6.1152 for 15 days, up 32 basis points on 12 days and the new high since February 21st.

Last Friday, in the international foreign exchange market, although the US consumer confidence index released by University of Michigan in December was unusually strong and boosted the US dollar recovery, there were rumors that the Bank of Japan refused to provide further stimulus, and the US dollar bullish profit came back.

The whole world fell 0.15% to 88.33.

Domestic spot

Above all, since the central bank announced its interest rate cut in November 21st, the renminbi's spot exchange rate has generally been weak.

In December 15th, the spot exchange rate of RMB against the US dollar opened slightly.

The market closed at 6.1912, the lowest closing level since July 28th.

Since the rate cut, the spot exchange rate has fallen by 663 basis points or 1.07% at closing price.

On the 15 day of the overseas non deliverable forward exchange (NDF) market, the latest exchange rate of US dollar / RMB was 6.3065 at the latest, reflecting that investors expect the RMB intermediate price to depreciate by about 3% a year, which has narrowed compared with the previous two trading days, but still expanded significantly before the rate cut.

Market participants said that the unilateral appreciation of the RMB over the past few years led to the opening of the US dollar at the beginning of the year and the end of the year as the usual practice. Therefore, the demand for foreign exchange purchase at the end of the year is usually more seasonal. The recent international market oil prices continued to fall, and the US crude oil futures fell below the US $60 mark, which also stimulated the demand for foreign exchange purchase by domestic oil importing companies. Moreover, since the interest rate cut in China in late November, the difference in monetary policy between China and the United States has also led to a rise in RMB depreciation expectations.

On the whole, the above factors may continue to suppress the spot exchange rate of RMB in the short term.

On the other hand, in view of the fact that the middle price is still stable and strong, the internationalization process of RMB is accelerating, the trade surplus is high, and the short-term technical callback pressure of the US dollar index is increasing, the trend of RMB depreciation is unlikely.