Exchange Market: RMB Follows The US Dollar

According to the China foreign exchange trading center, at 23:30 hours on Friday at 23:30 on the end of Beijing time, the RMB on the coast was 6.5785 yuan against the US dollar, which was almost flat at the end of the day.

Trading volume was $16 billion 790 million on Friday, up 4.85% from Thursday. The volume of pactions this week dropped 25.8% compared with last week.

Bloomberg simulation data show that the CFETS index has been strong for two consecutive weeks. The appreciation of the renminbi against a basket of currencies with a strong dollar will continue to bring greater devaluation pressure.

The intervention of the Central Bank of China has interrupted the sharp depreciation of the RMB against the US dollar after the new year. Over the past two weeks, the RMB exchange rate against the US dollar has fluctuated at a low level of 6.58. During the period, the US dollar continued to strengthen against the main currencies, which means that the RMB has been strengthening for a basket of currencies for two consecutive weeks.

Bloomberg's simulation index based on the basket of currencies of the CFETS index shows that the renminbi has been rising steadily for a basket of currencies for two weeks. The Beijing time 15:00 times 100.95 on Friday, an increase of 0.8% over the year's low of 100.11 in January 8th.

In January 15th, the official CFETS index was 100.39, an increase of 0.43% over the previous week.

This week, the yuan strengthened against the US dollar by about 0.2%, while the Bloomberg dollar index climbed 1.1%.

China

Next Monday, the CFETS will announce the CFETS index for this Friday.

Li Yuanchao, vice president of China, told Bloomberg in Davos, Switzerland on Thursday that fluctuations in the foreign exchange market were the result of market forces. The Chinese government did not intend to devalue the Renminbi or allow the renminbi to depreciate.

Li Yuanchao did not specify whether the Renminbi should remain stable against the US dollar or against a basket of currencies.

Against the backdrop of the continued strength of the US dollar, the stability of the US dollar means a basket appreciation, and a basket of stability constitutes a pressure and expectation on the depreciation of the US dollar.

In this regard, the chief economist of Everbright Securities, Xu Gao, suggested in the report that the central bank should deliver more clear and firm guidance signals.

"If policymakers convey the full determination of the market to stabilize the exchange rate of the renminbi against the US dollar, rather than vaguely expressing the stability of a basket of currencies, and creating a trend of appreciation in a timely manner, the devaluation pressure of the renminbi will gradually fade away," he wrote.

The China Foreign Exchange Trading Center launched the CFETS index in December, trying to guide the market to refer to a basket of currencies as a reference for maintaining the stability of the RMB exchange rate.

The yuan depreciated sharply against the US dollar 1.47% in that month, once again stimulating the expectation of depreciation and capital outflow.

Xie Yaxuan, director of macroeconomic research at China Merchants Securities, said 19 days that the stability and stability rate was regarded as China.

Top priority.

New year's first week

After a sharp downturn, Ma Jun, a central bank official, made a public statement about the formation mechanism of the renminbi's central parity, saying that the renminbi would increase its reference to a basket of currencies.

He also said that the future design of a basket basket mechanism could include a mechanism of gradual crawling on the basis of macroeconomic trends, allowing the renminbi to be "moderately strong or weak" for a basket.

"If we want to maintain stability in a basket of currencies, if the US dollar continues to strengthen, the Renminbi should be decoupled and depreciated," Li Liuyang, chief financial market analyst at MITSUBISHI Union Bank of Japan (China), said in an interview with Tokyo.

He pointed out that the central parity of RMB has basically remained unchanged against the US dollar recently, and the US dollar has strengthened against a basket of currencies, and the renminbi has strengthened correspondingly against a basket of currencies.