On December 2, the rebound momentum of RMB exchange rate remains strong. During the session, the exchange rate of offshore RMB against the US dollar rose to a maximum of 7.0069 yuan, just one step away from the 7 yuan mark.
experienced a rapid depreciation in the previous months, and the RMB exchange rate has recently rebounded strongly. Next, will the RMB exchange rate rise above 7 yuan in one fell swoop?
rebound momentum strong
On December 2, both onshore and offshore RMB exchange rates against the US dollar strengthened.
Wind data shows that as of 18:00 on the 2nd, the offshore RMB exchange rate against the US dollar was 7.0164 yuan, up 206 basis points from the previous closing price , with a high of 7.0069 yuan, approaching the 7 yuan mark; the onshore RMB exchange rate against the US dollar was 7.0234 yuan, up 557 basis points from the previous closing price, and a high of 7.0100 yuan.
Source: Wind
In addition, data from the Foreign Exchange Trading Center showed that on December 2, the onshore RMB closed at 7.0380 yuan against the US dollar at 16:30, up 411 basis points from the previous trading day, and a cumulative increase of 1,235 basis points this week.
After the exchange rate depreciated rapidly in the early stage, the RMB exchange rate has recently rebounded sharply.
From the perspective of high and low points, the offshore RMB exchange rate against the US dollar at 7.0069 yuan on the 2nd during the trading session rebounded nearly 5% from the previous low point of 7.3748 yuan; the onshore RMB exchange rate against the US dollar at 7.01 yuan also rebounded more than 4% from the previous low point.
According to the November data, after depreciating for many consecutive months, the RMB exchange rate rebounded strongly in November, with the onshore and offshore RMB exchange rates rising 2.15% and 3.96% respectively, with the single-month increase being the largest in the first 11 months of this year.
Data source: Wind
USD index , Wind data shows that as of 18:20 on the 2nd, the USD index was 104.62 points, falling below 105.
Is the RMB exchange rate rising again and above 7 yuan just around the corner?
Internal and external factors contribute to boost
"Overnight US PCE price data further weakened, and the market's expectations for Federal slowing interest rate hikes have risen. And at home, market sentiment has further improved. As of now, both internal and external factors contribute to the RMB exchange rate." Traders pointed out that we can continue to pay attention to the US non-farm data. If the data fails to exceed expectations, the US dollar index has a possibility of further retracement.
data shows that the US core PCE price index in October rose 0.2% month-on-month, the smallest increase since July this year, lower than market expectations 0.3% and 0.5% of the previous value; in October, the core PCE price index in October rose 5% year-on-year, and the rise slowed down for the fourth consecutive month, with the previous value rising 5.1% year-on-year.
Regarding the future trend of the RMB exchange rate, Zhang Ming , deputy director of the Institute of Finance of the Chinese Academy of Social Sciences, said that looking forward to 2023, there is sufficient motivation to rebound significantly against the US dollar. First, this round of Fed rate hike cycle may end in the second quarter of 2023; second, China's economic growth rate is expected to rebound significantly in 2023, while The growth rate of the US economy may decline significantly.
Zhang Ming also said: "Although 7 yuan is an important integer mark, it is not as important to domestic and foreign investors as we imagine." On the one hand, after the "8·11 exchange rate reform " in 2015, the RMB exchange rate against the US dollar fell below 7 yuan several times, which did not cause a significant depreciation of the RMB exchange rate against the US dollar. On the other hand, the toolbox for preventing the sharp depreciation of local currency exchange rate still has diverse tools and ammunition.
Relevant person in charge of the People's Bank of China once pointed out that the RMB exchange rate has exceeded 7. This 7 is not age. It cannot be returned in the past, nor is it a dam. Once it is broken, it will plummet thousands of miles. 7 It is more like the water level of a reservoir. It is higher during the water abundance period and will fall again during the dry period. It is normal for both rising and falling.
People's Bank of China Vice President and House Administration of Foreign Exchange House Pan Gongsheng said at the annual meeting of the 2022 Financial Street Forum that since 2021, the sensitivity of the RMB exchange rate to fluctuations in the US dollar index has decreased. From a global perspective, the depreciation of the RMB is at an average level compared with major developed and emerging market currencies.
Editor: Zhang Nan Zheng Yashuo
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