Spot Exchange Is Dull And RMB Is Hard To Appreciate.

On Monday (November 10th), the central parity of RMB against the US dollar rose 225 basis points to 6.1377 yuan, setting a new high of seven and a half months in one fell swoop.

On the same day, the spot rate of RMB closed at 33 basis points.

Market participants said that the 10 day rise in the middle price was mainly stimulated by the higher trade surplus in October, and the progress made in the process of RMB internationalization also played a role in boosting fuel consumption, while the spot price fluctuation was limited, which reflected that the current market sentiment was stable and the balance of foreign exchange and sales was more balanced.

The RMB exchange rate still has a short-term upward momentum, but taking into account the rise of the US and China economy, the stronger trend of the US dollar and the gradual stabilization of the two-way fluctuation of RMB, the probability of significant appreciation is relatively small.

According to the foreign exchange trading center, in November 10th, the central parity of RMB against the US dollar was 6.1377 yuan, a sharp rise of 225 basis points compared with the previous trading day, and set a new high since March 20th this year.

On the 10 day, the rise in the central parity of RMB against the US dollar was not unexpected in the direction. After all, the middle price has been following the overnight dollar fluctuation for a while. Last Friday, the US dollar index fell by 0.57% due to the poor us non farm employment data.

The market is concerned about the significant amplification of the fluctuation of the intermediate price.

Market participants said that in the context of overnight dollar weakness, trade data and favorable internationalization of RMB were concentrated in the short term, which stimulated the rise of the middle price.

The data released by the General Administration of Customs on 8 may show that China's trade surplus in October was US $45 billion 410 million, an increase of 46.3% compared with September, setting the third highest level in history.

The trade surplus continues to be at a high level, indicating that the demand for settlement of foreign exchange will continue to support the formation of RMB.

Traders said that this is the main reason for the 10 day increase in the middle price.

RMB

On the 10 hand, the SFC announced that the Shanghai and Hong Kong stock exchanges will start on the 17 day of this month, and the internationalization of RMB will enter a new stage.

In addition, on the 8 th of this month, the Central Bank of China signed a memorandum of understanding on bilateral currency swap agreements with the Central Bank of Canada and the establishment of RMB clearing arrangements in Canada. On the 9 day, the people's Bank of China issued a public announcement to formally authorize the Canadian subsidiary bank of ICBC (601398) to act as the clearing bank of Toronto RMB business. This is the first time that the central bank has chosen RMB clearing bank in North America.

Recently, internationalization of RMB has been reported frequently.

Analysts pointed out that the advantage of RMB internationalization is to enhance the international status and currency stability of RMB, which will further enhance the attraction of RMB and bring pressure on RMB appreciation.

It is important to note that the performance of the renminbi's exchange rate against the US dollar in the current exchange market on Monday appears to be moderate in relation to a rise of more than 200 basis points in the middle price.

Judging from the disk, yesterday's RMB against the dollar spot exchange rate opened 49 basis points higher than 6.1180, most of the time around the 6.1150 narrow fluctuations, the highest intraday to 6.1135, followed by a concussion, and finally closed 6.1196, compared with the previous trading day rose only 33 basis points or 0.05%.

Market participants said that the increase in the middle price and the seasonal increase in demand for foreign exchange settlement still support the RMB spot exchange rate in the short term. However, considering the differences in economic fundamentals and monetary policies between the two countries, the probability of a significant appreciation of the renminbi will be smaller in the future.

This year, the recovery of the US economy is obvious to all. The Fed has announced its withdrawal from the third round of QE at the end of October. Raising interest rates is only a matter of time.

Against this background, the US dollar bottomed out in May, and the US dollar index broke 88 last week.

Although the US dollar index has been callback in nearly two trading days, analysts believe that short-term adjustment is not enough to change the strong trend of the US dollar in the medium term.

At the same time, the central shift of China's economic growth has become a consensus. In the context of sustained economic growth this year, loose monetary policy continues to be overweight.

Some analysts believe that in the "three phase" superimposed economic new normal, the long-term downward trend in interest rates is also the trend of the times, which will lead to a gradual convergence of interest rates between China and the United States.

Shenyang Wanguo Securities analyst pointed out that in the case of the Sino US economic growth, the narrowing or even negative growth of international reserves will become the norm, and the market environment does not support the substantial appreciation of the renminbi.

What is worth mentioning is that the RMB exchange rate has shown a trend of two-way fluctuation and increase in amplitude this year, which has caused a trend effect on the business of foreign exchange settlement and sale.

Data show that in the first four months of this year, the spot exchange rate of the renminbi once depreciated more than 3%, followed by a 6 month appreciation in 5-10 months, and the current depreciation rate has been reduced to about 1%.

At the same time, although the trade surplus has continued to exceed US $30 billion since May, the deviation between RMB spot rate and the central parity price has continued to shrink. As of November 10th, the two spreads have narrowed to 181 basis points from the first half of the year.