The Strength Of The Renminbi Is Actually A Retreat.

When the last time the renminbi fell to the US dollar, the bears rushed to attack, so Bill Gross exclaimed that it was simply a reprint of the 1992 pound sterling sniping war.

On the one hand, China's economic data in April are not as good as market forecasts. On the other hand, the Fed's expectation of raising interest rates at the earliest next month is stronger and stronger.

At 17 hours on Thursday, New York, offshore renminbi was almost flat against the US dollar at 6.5587 yuan.

A survey by the Bank of America and Merrill Lynch for fund managers found that the devaluation of the renminbi and China's growing debt default are seen as the second largest tail of the global market after Britain's withdrawal from the EU.

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The strengthening of the US dollar has also brought greater pressure to the yuan.

As more and more Federal Reserve policymakers publicly announce their support for raising interest rates as early as possible, the possibility of US interest rate hikes is rising.

Federal funds rate futures prices show that the probability of raising interest rates in June was 28%, and in July, the probability was more than half to 51%.

Well known investors say that the new round of devaluation of the renminbi has adopted a different way from the depreciation in August 2015. Last time, the depreciation of the value of 1000 yuan was devalued for several consecutive days.

In January this year, to raise renminbi

On the one hand, China has stepped up market intervention operations, adopted various measures to restrict capital outflow, and launched other stimulus policies to provide kinetic energy for the economy.

The RMB has been stable for several months.

In the first quarter, the most accurate analysts predict that the bearer should be "stand aside".

"Beijing will increase its support for the renminbi," said Frederik Kunze, an economist at North Deutsche Bank in Hannover. "Now the market is becoming more and more important."

Although the fall appears to be temporary, it all depends on the duration of the attack. If the time is too long, the stock market will have a serious panic drop.

This happened in Hongkong in 1998. Speculators attacked the exchange rate and forced the interest rate to rise.

However, indicators that measure the market's bearish sentiment show that

They haven't played yet.

One of the key data reflecting the pessimistic degree of overseas investors is the offshore RMB exchange rate discount to offshore exchange rate has dropped to nearly zero level from 2.9% at the beginning of the year.

The yuan option price shows that the probability of the exchange rate falling to 7 before the end of the year dropped from more than 30% at the beginning of the year to 13%.

The implied volatility of RMB options has remained unchanged this month.

The market has every reason to believe that China has regained its grip on the reins of the RMB exchange rate.

After a net outflow of US $512 billion 700 million in 2015, China's foreign exchange reserves finally achieved a net inflow of US $17 billion 300 million in March and April this year, indicating that the Central Bank of China has reduced its intervention in the market.

"At this stage, I think it is meaningless to take the renminbi down, and the Chinese government will not let itself be led by the nose," said Hilmi Unver, head of alternative asset investment at Notz Stucki & Cie, a Swiss fund management company. In an interview with Bloomberg, she said: "China will take all necessary measures to rebuild confidence in the renminbi. It is very unwise to bet on the depreciation of the renminbi at this time."