RMB Or Stable Policy Has Room To Relax

During the New York session, offshore renminbi was consolidated around 6.52. Traders believe that with the advent of the G20 conference, the renminbi will remain stable in the next few weeks.

Economists expect the monetary policy of the Central Bank of China (PBOC) to be further relaxed.

Traders in London say that the US dollar / people are unlikely to go up sharply in the near future, and the US dollar / offshore renminbi may remain in the 6.50/55 range because of China.

President Zhou Xiaochuan's weekend speech issued a clear signal to combat speculation.

Shaun Osborne, a strategist at Feng Ye bank in Toronto, told foreign media that the Chinese authorities are ensuring liquidity in the domestic financial market, and the recent series of measures are short-term.

Bringing downside risks will curb the rise of the yuan.

It is reported that the Central Bank of China has reduced the interest rate of the 6 month medium term lending facility (MLF) from 3% to 2.85%, and the 1 - year MLF rate has dropped from 3.25% to 3%.

Every working day will be carried out in the future.

Operation.

Zhou Hao, an economist at Commerzbank, said that China still needs a very loose monetary policy to leverage the highly indebted industries. The Central Bank of China is expected to cut interest rates by 25 basis points in the first quarter. The differences between CPI and PPI reflect that China is pforming from manufacturing drive to consumption drive.

In an interview with Bloomberg economist Chen Shiyuan, the Central Bank of China will drop 50 basis points to 17% this quarter.

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One reason why the US is in recession is that the Fed has been so cautious in raising interest rates.

Paradoxically, the long-term wait-and-see stance may actually increase the probability of the US economy falling into recession in the next few years.

The bank expects the Federal Reserve to see this situation, so it is expected that, if initially denied, if the economy falls into recession, the Fed will quickly introduce negative interest rates, implement strong forward-looking guidelines and launch another round of quantitative easing (QE).

According to farba, the duration of the next round of economic recession in the United States is likely to be longer than the typical form. Generally speaking, the average period of economic recession in the United States is four to five quarters.

The reasons why the US recession is longer than the average are as follows:

1., the Fed's lack of ammunition against the recession.

2. the shock and impact of the new round of quantitative easing (QE) will no longer be seen.

3. core inflation is lower than the previous recession cycle level.

4. fiscal policymakers seem very reluctant to adopt fiscal stimulus measures.

5. because investors haven't recovered from the previous crisis, market confidence is not expected to pick up quickly.

6. despite the fact that the US housing market did not deteriorate to the level of subprime crisis in 2007, housing prices were relatively high in terms of relative income.

7. the global economy looks weaker and less room for stimulus.