China'S Capital Outflow Pressure Is Expected To Ease

Yesterday, the US dollar index fell from its 14 year high and fell below the 103 barrier.

Before Thursday's U.S. economic data and Christmas holiday, some traders made a profit in the quiet and cut the dollar.

The US dollar has risen 4.5% since the US presidential election in November 8th, as traders bet on President elect Trump and the Republican controlled house of representatives will implement a massive tax cut and fiscal spending plan to stimulate economic development.

But analysts warn that if Trump's policy details fail to meet market expectations, the dollar will fall back easily.

Benefit from overnight

The renminbi's exchange rate with the US dollar has largely extended the pattern of horizontal rest since this week.

In addition, offshore CNH exchange rates remain strong in the domestic market.

Analysts say that as the end of the year draws near, the market is temporarily in equilibrium, and the RMB exchange rate is expected to remain stable in the short term.

Traders said that although the passenger market continued to have larger demand for foreign exchange during the end of the year, the big bank continued to provide us dollar liquidity support at key points, which still largely stabilized market participants' expectations of the short-term RMB exchange rate trend.

On the other hand, in recent trading days, the central bank has managed to stabilize the balance of capital in the inter-bank market through window guidance, and bond markets and stock markets have gradually stabilized after a sharp fall, which has also positively boosted the stability of the inter-bank foreign exchange market.

In addition, the offshore liquidity of Hongkong offshore market is still tense, shorting offshore.

The force will continue to be suppressed, and the reversal of the exchange rate between the two places will also help stabilize the RMB exchange rate in the near future.

In terms of external factors, foreign exchange traders believe that although the US dollar index is still in the upward trend in the short and medium term, with the advent of Christmas holidays, the space for us dollar index to continue to rise in the year is expected to be limited.

Against this background, the major non US currencies in the world will be phased out after the general decline.

For the RMB exchange rate, although the pressure from the strong dollar is still hard to dispel, there is a possibility of a rebound in the short-term performance of the RMB against the US dollar.

On the whole, at the end of the year, the domestic financial market as a whole is "stable in mind", and within a week or so, the exchange rate of RMB against the US dollar is expected to be stable. The overall volatility is expected to converge significantly earlier than before, and the probability of breaking "7" in the year will be very limited.

The State Administration of foreign affairs has recently strengthened its foreign currency in Renminbi.

Channel management, and further improve the MPA management framework.

Nowadays, with the decline in demand for offshore foreign exchange purchase, the size of the central bank's use of offshore foreign exchange reserves and central bank foreign exchange funds is expected to fall, and the pressure of capital outflow is expected to ease.

It is estimated that the external net payment scale of RMB will decrease in December, and the difference between central bank's foreign exchange and foreign exchange settlement will also be narrowed.

He pointed out that the Fed's previous interest rate increase was based on the current time point judgment rather than the real interest rate increase. It is estimated that the Federal Reserve will raise interest rates 1 to 2 times in 2017.

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