The Dollar Index Is More Than 100 Points Just Around The Corner.

Although the US dollar strengthened during the year, the pressure on the RMB would be devalued. However, considering the steady progress of RMB internationalization and the expected high trade surplus, the RMB has no tendency to depreciate in the medium and long term.

The tightening of expectations is more supportive of the RMB exchange rate.

Since the second half of 2014, the pace of US dollar strength has been overwhelming.

As of December last year, the US dollar index attacked near the 80 point. At the end of the year, it stood at 90 points, setting the biggest increase in the past twenty-three years.

At the beginning of 2015, the dollar remained bullish.

In from January 1st to 6th, the US dollar index continued to break through the 91 pass, and on the 7 day, the Asian market reached a maximum of 91.89 points, pushing the 92 point mark.

The current appreciation of the US dollar is mainly due to the leading role of the US economic cycle and the monetary policy cycle.

After the financial crisis, the US economy took the lead in returning to normal under the stimulation of super conventional monetary expansion. In the context of economic growth and the steady decline in employment rate, the Federal Reserve officially closed QE last October and opened the process of currency normalization.

The market generally believes that the Federal Reserve's interest rate hike is only a matter of time. This June will be the sensitive time point for raising interest rates for the first time. It is estimated that by the end of 2015, the Fed's benchmark interest rate will gradually increase to 1%.

At the same time, as the two largest currencies in the US dollar index, the situation facing the euro and yen is opposite to the US dollar.

On the economic front, the pace of economic recovery in the euro area and Japan lags behind that in the United States.

In October last year, IMF raised the US economic growth rate to 3.1% in 2015, while the growth rate of the euro area and Japan's economy dropped to 1.3% and 0.8% respectively.

In terms of monetary policy, under the background of economic downturn and deflationary pressure, the Central Bank of Japan and Europe are in a quagmire of continuing to expand their balance sheets.

In 2014, the European Central Bank launched measures to cut interest rates, implement negative interest rates on deposits, and increase the size and so on.

In January 2nd, Delagi, the European central bank governor, suggested that a comprehensive QE of large-scale purchases of government bonds would be launched, resulting in the euro falling against the US dollar and the US dollar index rising nearly 1% throughout the day. The Japanese Central Bank unexpectedly announced the acceleration of monetary expansion at the end of October last year, which means that its easing pace has not stopped.

For now,

It is widely believed that in the context of the United States continuing to run against the direction of economic and monetary policies in Europe and Japan, the US dollar will continue to be strong in 2015, and the US dollar index is expected to stand on 100 points again after 12 years.

Against the backdrop of the US dollar entering the bull market, the renminbi traded against the US dollar in the last two months of last year.

Considering that there are differences between China and the United States in terms of economic and monetary policies, with the possibility of narrowing spreads and capital outflows, the market is inclined to believe that the yuan will bear devaluation pressure against the US dollar this year.

However, judging from the recent performance of the RMB against the US dollar, the renminbi still shows a relatively strong operating characteristic.

Data show that in January 6th, the US dollar index closed at 91.61 points, hitting a new high of over nine years.

In January 7th, the central parity of RMB against the US dollar dropped slightly by 13 basis points to 6.1269, but it is still relatively high since March last year.

Spot exchange rate, in the context of the rise of the US dollar and the reduction of the middle price, the spot exchange rate of the RMB against the US dollar closed at 6.2125 on the 7 day, but it rose by 5 basis points from the previous trading day.

For a long time, although the spot exchange rate of the renminbi has depreciated slightly in 2014, it has not been separated from the 6.10-6.30 operation range since last March, but the two-way fluctuation is more obvious than the intermediate price.

Market participants say that although the US dollar is strong, the domestic market is still relatively balanced.

On the one hand, the foreign exchange administration recently stipulates that the comprehensive position of the bank's foreign exchange settlement and sale is no longer linked to the foreign loan to deposit ratio, which makes the bank's demand for us dollar position to decline. On the other hand, A shares IPO will be centralized next week.

The two factors superimpose the demand for short term settlement of foreign exchange and support the RMB exchange rate upward.

In the medium to long term, analysts pointed out that the pressure of devaluation of the US dollar is obvious, but the RMB does not have the basis of the trend of depreciation.

First of all, the RMB is seeking internationalization, which determines the stability of the RMB value. Secondly, although the recovery of overseas economy is slow, but after all, it is picking up, and the government vigorously promotes the "going out" strategy such as "one belt and one road". China's export growth is expected to continue to recover. The trade surplus is expected to continue to be high and support the RMB. Third, while proper depreciation is beneficial to exports, it is also necessary to guard against the massive capital outflow and the impact on China's capital market caused by the rapid depreciation. Therefore, it is necessary for monetary authorities to take measures to stabilize exchange rate expectations.

The huge foreign exchange reserves, the guiding role of the middle price, and the central bank's failure to completely liberalize capital controls and abandon foreign exchange control also show that the authorities have adequate means of stabilizing expectations.

It is noteworthy that in the past period of time, when the central bank gradually withdrew from daily intervention, the spot exchange rate of the renminbi showed a spontaneous two-way fluctuation, rising or demealizing pattern, to some extent, reflecting that the RMB exchange rate had basically entered equilibrium.

Some analysts expect that in 2015, the RMB exchange rate may continue to show broad fluctuation and two-way fluctuation pattern, the spot exchange rate fluctuation range or 6.00-6.30.