RMB exchange rate against the US dollar fell by nearly 10% this year, falling below 7.2 at one point. With the statement of central bank , the RMB exchange rate against the US dollar rebounded for a while, but then restarted its decline. Judging from the exchange rate trend of the RMB against the US dollar, it is closely related to the trend of the dollar index .
Simply put, it is The Federal Reserve raises interest rates , the US dollar index soars, the RMB exchange rate against the US dollar corresponding to the decline, while the US dollar index weakens, and the RMB exchange rate strengthens.
In 2022, the Federal Reserve raised interest rates many times, but the United States still remained high. Obviously, the Federal Reserve has placed inflation control in a more priority position. The market expects that the probability of the Federal Reserve raising interest rates by 50 basis points to the range of 3.50%-3.75% in November is 0.6%, and the probability of raising interest rates by 275 basis points is as high as 99.4%; by December, the probability of the Federal Reserve raising interest rates by 100 basis points is 0.2%, the probability of the cumulative interest rate by 125 basis points is 33.1%, and the probability of the cumulative interest rate by 150 basis points is 66.7%.
From the institutional forecast data, it can be seen that the probability of the Federal Reserve raising interest rates by 75 basis points in November is as high as 99.4%, which is almost a foregone conclusion. The RMB exchange rate against the US dollar will continue to be under pressure and decline without any surprises, unless we also raise interest rates. However, the domestic economic situation is facing a test, especially in the real estate industry. It is obviously unlikely that interest rate hikes are expected at this time. Therefore, it can be said that the possibility of the RMB exchange rate falling is as high as 99.4%.
After the Federal Reserve raised interest rates several times, the interest rate has approached 4%. The corresponding US dollar deposit interest rates of many domestic banks are around 4%, which is far higher than the RMB deposit interest rate. It can be said that although the scale of my country's foreign exchange reserve is as high as more than one trillion US dollars, the inverted interest rate will still cause the RMB exchange rate to continue to face downward pressure.
In addition to raising interest rates, unless the economic situation improves rapidly, the RMB exchange rate is under great pressure to fall. Of course, in the long run, as experts say, the RMB does not have the basis for long-term depreciation...
