Should The Renminbi Absorb The US Dollar?

If it is a short-term investor, there may be a better buy in the case of "non farm data" in the US, but if it is a long-term investor, it can be built slowly now because if it falls even more, it can buy more.

This week the renminbi was strong and continued to rise against the US dollar. The yuan closed up 0.02% against the dollar yesterday, closing at 6.1970.

The main reason for the analysis of market participants is that many investors have lowered the expected number of new non farm employment in the US in March, which has weakened the US dollar and increased the non US currency.

In addition, the official Manufacturing Purchasing Managers' index (PMI index) released by China's National Bureau of statistics and the logistics and purchasing Federation (CFLP) on March has stepped into the expansion area, making the RMB more volatile.

　　 Some US economic data are lower than expected, promoting non US dollars. currency rebound

On Tuesday, the last trading day in March, the US dollar increased to 1.07% against the RMB exchange rate in the single month, the biggest increase since December 2011. By yesterday, the yuan had closed against the US dollar at 6.1970, achieving a 4 consecutive rise.

senior foreign exchange Mr Ng said that the recent dive in the US dollar was due to the fact that the real economic data were weaker than expected, and that non dollar currencies began to overshoot and rebound.

"The ADP data on private employment and ISM manufacturing industry released by the US overnight were not as good as expected, which surprised the market. It also cast a shadow over the" non-agricultural "employment report to be launched on Friday. Data show that the number of private employment in the US ADP, known as "small non-agricultural", has increased by 189 thousand people, the lowest growth rate since January 2014, far less than 225 thousand expected.

Apart from the impact of the US economic data, there are market participants who appreciate the RMB spot exchange rate continuously because the Chinese government is strongly supporting the RMB so as to ensure that it can become a global reserve currency on the premise of stable currency value. For example, Zhou Xiaochuan, the governor of the central bank, has appealed to the IMF to add renminbi to its basket of "special drawing rights" currency and maintain the RMB exchange rate steadily and steadily. This is the best way to make the renminbi acquire the status of the global reserve currency.

　　 Long term investor You can bargain for us dollars.

For the renminbi, the recent dive in the US dollar is a buying opportunity for many investors.

Now, should we absorb it now?

Miss Luo has 30 thousand dollars in her hand, which was sent by her father-in-law when the dollar was still in the "8 era". Because many people used to say that the value of the dollar had been preserved, and she had not converted it into Renminbi. In the past few years, she had lost a lot of money and had always been in the safe.

At the beginning of last year, the dollar began to rise strongly. Miss Luo was very happy. However, the dollar seemed to be weakening a few days ago. She hesitated: did she rush to sell when the dollar rose a little bit, or did she buy a little while the price dropped?

Mr Wu's view is that it can be absorbed in a bargain. In his view, the US economy has been improving and the US dollar will continue to strengthen. In addition, the Fed now has a clearer position. 6-9 months will be the right time to raise interest rates. Once interest rates are raised, the US dollar will continue to strengthen.

"The United States will soon announce the" non-agricultural data "(3 figures of non-agricultural employment, employment rate and unemployment rate) in March, and the market is expected to increase by 249 thousand. If the data is better than expected, the US dollar index could rise to 100 again. Now the market generally believes that the US "non farm data" in March will not be very good. Many agencies have lowered their expectations, but I think it should not be very bad. Even lower than market expectations, I think the employment data in the United States will still be stronger in the next few years. Moreover, the performance of the February data is too good, which will have some impact on the data in March, so that the growth rate in March will be slower.

Mr. Wu said he felt that the US dollar index would have a short or upward trend, but the result was sure to go up.