External Market Turmoil Makes Market Cautious

China's renminbi rose slightly against the US dollar on Tuesday.

The latest HSBC November PMI value of China's manufacturing industry fell below the dividing line of ups and downs, and yesterday's record drop in international oil prices led to the biggest single day decline in 1998.

Traders said,

The response to the external market turmoil is not intense, but China's economic data are not good enough in recent years, and the willingness to settle foreign exchange market is obviously low, even if the new announcement of November.

The amount of direct investment (FDI) data increased by more than 20% and can be converted into the amount of foreign exchange settlement remains to be observed, and it is not expected to bring much appreciation pressure to the RMB.

"Recently, market participation is relatively small, and spreads remain as broad as ever, and liquidity has been very poor."

A head of equity trading said that the support of the yuan was stronger at 6.20 yuan, and it is not easy to fall by the end of the year.

He also predicted that the short term

Or fluctuate up and down near 6.19 yuan, and there is more room for further depreciation, and more likely to be oscillated in the 6.17-19 range.

China's Ministry of Commerce announced on Tuesday that the actual use of foreign capital (FDI) in November was 10 billion 360 million US dollars, up 22.2% over the same period last year.

In 1-11, the actual use of foreign capital was US $106 billion 240 million, an increase of 0.7% over the same period last year.

In December, China's manufacturing PMI fell below 50 mark, the lowest in seven months, due to a sharp decline in new orders and price indices.

This reflects that domestic demand is still sluggish and manufacturing continues to decline. Policy needs to be further relaxed in the coming months.

In the global market, the yen hit a two week high against the dollar on Tuesday. Rupee rebounded as investors avoided high risk assets while Russia's central bank raised interest rates to stop the ruble crash. The currency was the main victim of the fall in oil prices.

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The yuan weakened against the US dollar on Wednesday (December 17th), reversing the intermediate price that hit a 10 month high.

The strong demand for foreign exchange is still the main reason for the devaluation of the RMB, but the central bank's stance on maintaining stability is clear, and the overall impact of the recent external market turmoil is limited.

The US dollar / RMB inquiry system was reported at 6.1937 noon and 6.1903 on Tuesday.

The central parity of the US dollar / RMB central bank was 6.1137, the highest since February 19th this year, and the middle price on Tuesday was 6.1182.

In the overseas non deliverable forward foreign exchange (NDF) market, the US dollar / Renminbi one year variety is newly reported at 6.3080/20, ending on Tuesday at 6.3070.

The latest offshore dollar / RMB spot report in Hongkong was 6.1961/81, and the last trading day was 6.1925.

Traders pointed out that despite the recent Russian rouble collapse triggered outflow of emerging market expectations of capital outflows, but China, as a large importer of crude oil, the international crude oil prices fell on the economic fundamentals and the balance of payments advantage.

Traders also pointed out that the Central Bank of China has maintained clearer stability this year.

"There are several waves of short selling of RMB in offshore markets this year, but basically failed.

At present, the price difference between offshore and onshore markets is small, and pricing power is basically in the onshore market. "

In the international exchange market, the US dollar week Sanya has narrowed its decline, leaving the overseas market low.

The US dollar has fallen to a low level in the overseas market, which is affected by the sharp fall in oil prices, the Russian financial crisis and the expectation that the Fed will adopt a cautious tone in the monetary policy statement.

The International Bank of clearing (BIS) recently announced that the RMB effective exchange rate index increased by 2.3% to 124.43 in November, rising for sixth consecutive months and a record high.

The data also showed that the RMB nominal effective exchange rate index increased by 2.5% to 120.62 in November, and it also rose for sixth consecutive months and renewed its historical record again.

In the same month, the spot exchange rate of RMB against the US dollar fell 0.51%, while the US dollar index rose to a four year high.

It also shows that the effective exchange rate of RMB is mainly boosted by the increase in other currencies. In the same month, the RMB rose to 0.1% against the euro, but the Japanese yen rose to 8.12%.

The real and nominal effective exchange rate of RMB began to stabilize and recover in June.

As of May, it was down 5.98% and 4.35% respectively compared with the January high.

According to BIS data, the real effective exchange rate and nominal effective exchange rate of RMB rose by 7.9% and 7.2% respectively in 2013, and the increase was significantly higher than that of 2.2% and 1.7% in 2012.