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RMB big rebound! Is the inflection point coming?
Nov 17,2023
The RMB exchange rate is rapidly recovering.“Lost land”.
As11Month15On the evening of the day, the exchange rate of the RMB against the US dollar in the domestic onshore market touched.7.2427,Higher than the previous trading day's closing price465basis points, once set in intraday8Highest since mid-month7.2326.
The RMB exchange rate against the US dollar in the offshore market is hovering.7.2521In the past two trading days, the increase was more600basis points.
In the eyes of the industry, this is mainly due11Month14Day of America10MonthCPIThe data fell back beyond expectations, further dampening Wall Street's expectations that the Fed could raise interest rates further.
Dollar dives, yuan counterattacks
Recently, according to data from the U.S. Department of Labor,10In January, the U.S. consumer price index rose year-on-year.3.2%, more9of the month3.7%Slowdown, lower than market expectations.
Not only that, the United States.10MonthCPIThe flat month-on-month also shows that the upward momentum of US inflation is slowing.As10In the five months of the month, the American coreCPIFor2.8%Significantly lower than in the first five months of this year.5.1%.
Boosted by inflation data, U.S. stocks and bonds both soared. Eastern Time14Japan, U.S. bond yields collectively fell by double digits.10Yields on U.S. bonds fell4.4%,3The biggest one-day drop since the month.
At the same time, the Fed will raise interest rates as soon as possible, driving the dollar to dive and the yuan to start a counterattack.15On the evening of the day, the yuan rose more than once in intraday trading.600Point, spot volume enlarged to more300Billions of dollars.
As of the close of the day, the onshore RMB/USD exchange rate closed7.2481It was a three-month high. The offshore RMB exchange rate against the US dollar closed7.2553.
In this regard, Sun Wu, chief financial market analyst at Mitsubishi UFJ Bank Co., Ltd., said that the inflation data has cooled more than expected, which means that the US interest rate hike cycle may be over.
Emerging Markets Strategist, Wells FargoBrendan McKennaIt is believed that Asian currencies may perform better than other regions in the coming months.
The reason is that, on the one hand, the export environment of Asian countries is improving, so that the foreign trade surplus of these countries is expected to resume growth.
On the other hand, the economic growth rate of Asian countries still leads the world, which further expands the room for appreciation of relevant currency exchange rates.
Why the RMB exchange rate is strong
It is worth noting that the sharp rebound in the RMB exchange rate is not only due to the fall in the US dollar index, but also the significant narrowing of the US-China interest rate differential.
The continued improvement in China's economic fundamentals and the return of capital to emerging markets also play a key role.
earlier, a hong kong bank foreign exchange trader said,11The inversion of the interest rate differential between China and the United States has continued to narrow since the beginning of the month, so that the pressure on the depreciation of the RMB continues to weaken,Some important foreign exchange indicators have reflected the latest changes in the long-short game situation in the RMB market.
He believes that behind this phenomenon is a growing number of overseas quantitative investment funds due to the continued narrowing of the U. S.-China spread inversion and reduce the short position of the yuan.
Currently, the American pioneer,PimcoBlackRock and other large investment institutions are in a big way to copy the bottom of U.S. debt, and more and more Wall Street investment institutions believe that U.S. bond yields have peaked down.
In addition to the continued narrowing of the US-China interest rate differential, the return of capital to emerging markets is another key factor that is expected to help the RMB exchange rate continue to strengthen.
As more and more European and American investment institutions believe that the Fed's interest rate hike cycle is over, the wave of global capital returning to emerging markets has come, and Asian emerging market currencies such as the renminbi will become the biggest beneficiaries.
After all, the fundamentals of economic growth in Asian countries are relatively better, increasing the security and appreciation of local currencies.
In contrast, central banks in Latin American countries such as Brazil and Chile are continuing to cut interest rates, making financial markets cautious about investing in Latin American currencies.
This means that more funds will flow to Asian currencies such as the renminbi, further pushing up the valuation of the latter's exchange rate..
In this regard, the head of Asia macro investment strategy at Mellon Investment Management in New York.Aninda MitraIt is believed that there are many other factors that are expected to stage a rebound in Asian currencies.
Including Asian currencies have sufficient exchange rate flexibility, economic fundamentals are relatively good, and the short-term debt situation of some Asian countries has improved.
From the perspective of China, as policies continue to increase, the Chinese economy is gradually showing signs of stabilization and recovery.
Recently, according to the latest data from China's National Bureau of Statistics,10In January, the value added of industries above designated size increased year-on-year.4.6%,6month high. Total Retail Sales of Consumer Goods Growth7.6%A five-month high.
subsequently,IMFUp-regulation2023year,2024China's economy is expected5.4%,4.6%. The reason is strong consumer spending and trillions of government bond boots on the ground.
Goldman Sachs will be2024The forecast for China's economic growth in4.8%.And in Flash's view, investment will be a pull2024The most important factor in China's economic growth.
First of all, the Chinese government has introduced policies related to affordable housing and urban village reconstruction, which will stabilize the real estate market.
Secondly, in terms of policy,2024year, China will have the equivalent11%GDPof the generalized deficit ratio, which is the same value as2023Year is quite.
In the future, the central government will make up for the lack of local financial support, and the central government will maintain a relatively loose level.
While monetary policy will be a means of supporting fiscal policy, the People's Bank of China or in2024There are three cuts in the year, and one rate cut is possible.
Looking ahead to the late trend of the RMB exchange rate, CITIC Securities chief economist Ming Ming believes that,As the domestic economy stabilizes and recovers, and the central bank continues to flexibly use foreign exchange market control tools, the value of the RMB is expected to stabilize and recover.
In addition, Wang Youxin, a senior researcher at the Bank of China Research Institute, said,Next year, China's economic recovery will be further strengthened, and the supporting role of the RMB exchange rate will be strengthened.
The negative impact of the US economy under rapid interest rate hikes will further gather, downward pressure will appear in more areas, the Fed's interest rate hike cycle is coming to an end, and the external constraints on the RMB will weaken.
Taken together, the RMB exchange rate is expected to stabilize and recover next year.
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