Recently, the soaring RMB exchange rate has caused many foreign traders to panic. For those who still have unsettled U.S. dollars on hand, seeing the exchange rate heading straight to the 6.7 era, perhaps this order is in vain.
Since June, the RMB has risen sharply by 5.55%. Not only has it risen for three consecutive months, it has rebounded by more than 4,000 points from the year’s low of 7.1765 on May 27. Last week, the RMB exchange rate ushered in the eighth consecutive week of gains. That week, the RMB hit new highs in more than 16 months, recording an increase of 1.16%.
How will the subsequent exchange rate go? We have collected a number of analytical opinions from professional organizations for your reference.
First of all, it is not so much an appreciation but a depreciation of the dollar.
Chen Daofu, deputy director of the Financial Research Institute of the Development Research Center of the State Council, believes that the appreciation of the RMB has a great relationship with the depreciation of the US dollar. From the perspective of the general trend, the US dollar is in a gradually downward depreciation trend; however, some short-term pattern changes and short-term economic policy changes are enough to affect short-term fluctuations. Although judging from the internal economic trends, the RMB will continue to face appreciation pressure in the future, in the face of relative global turmoil and changes in the future, it is not appropriate to easily make a trend judgment on the RMB exchange rate.
Tu Yonghong, deputy director of the International Monetary Institute (IMI) of Renmin University of China and professor of the School of Finance of Renmin University, believes that due to factors such as the epidemic and the global economic downturn, the U.S. economy experienced the largest decline since World War II in the second quarter. , dragging down the dollar sharply. Coupled with the Federal Reserve’s unlimited quantitative easing policy, the credit of the US dollar has been further overdrawn. The U.S. dollar index has dropped from 98 at the beginning of this year to 92 recently, a drop of 6%. This means that the U.S. dollar has overall fallen by 6% against major currencies such as the euro, pound, and yen included in the U.S. dollar index, which is higher than the The decline in the yuan. Judging from the current situation, it is actually the dollar that is weakening, not the yuan that is appreciating.
Guan Tao, global chief economist of China Bank of China Securities and former director of the Balance of Payments Department of the State Administration of Foreign Exchange, said that the current appreciation trend of the RMB exchange rate in domestic and overseas markets has not yet been established, but in the context of global flooding, China It may face a new round of capital inflows and the resulting pressure on RMB appreciation. If a new round of capital flows into China, the RMB exchange rate may appreciate rapidly, and the extent of the space is uncertain. But it is not yet certain that the RMB has entered a rising exchange rate cycle. The last round of RMB appreciation cycle was after the outbreak of the financial crisis in 2008. There are three differences between this time and the 2008 appreciation cycle: first, during the last round of RMB appreciation, China’s external economy was seriously unbalanced; second, China’s economy grew rapidly in 2008, and now China’s economy has entered a stage of medium-to-high-speed growth, although in the second quarter There will be a leading advantage if the economy rebounds first, but if other international economies also resume rebounding in the third quarter as scheduled, this leading advantage will converge. The economic downturn means that the overall return on investment of Chinese assets is declining, which has a negative impact on the long-term development of the RMB exchange rate. The trend will also have a certain impact; thirdly, the last round of economic crisis was about big countries cooperating to deal with the crisis, but now it is a game between big countries, which has brought many uncertain effects on the world’s economic recovery and financial operations. Therefore, the trend of the RMB exchange rate will definitely be very different from last time.
The Kaiyuan Securities research team pointed out that the sharp appreciation of the RMB exchange rate in the past three months is a manifestation of the “dislocation” of social recovery and economic development cycles after the epidemic in China and the United States under the background of the global epidemic. Zhao Wei, chief economist of Kaiyuan Securities, believes that although the RMB exchange rate continues to perform well due to the impact of the U.S. dollar index, my country’s fundamentals and policies, as the epidemic in the United States gradually becomes relatively controllable, the inventory cycle may begin, thus driving its Affected by factors such as the significantly accelerated pace of economic recovery, the U.S. economy has met the conditions for recovery. The RMB will not see a sharp rise or fall in the future. The medium and long term will mainly be dominated by stable and two-way fluctuations.
Zhang Liqing, former dean of the School of Finance at the Central University of Finance and Economics and chief economist of PwC China, believes that the trend of changes in the RMB exchange rate seems to be highly uncertain, and it is difficult to say that it has entered the appreciation channel. , but tend to believe that the probability of future appreciation is greater.
Gao Shanwen, chief economist of Essence Securities, believes that the RMB has not only fallen completely, but has already fallen. In the future, the RMB will enter a longer appreciation process, which may start soon, and the appreciation time will be quite long. The evidence comes from two aspects. China’s export share has begun to rise against the trend; the US dollar exchange rate is on a depreciation trend.
Secondly, how high will it rise within the year?
Tianhui Mu, co-head of Asia macro research and chief Asia-Pacific equity strategist at Goldman Sachs, said that Goldman Sachs expects the onshore RMB exchange rate against the US dollar to rise to 1 US dollar in the next 12 months. 6.5 yuan.
China Merchants Securities Macro Team is hereThe new report pointed out that the RMB has entered an appreciation cycle and will rise to between 6.0 and 6.5.
Mizuho Bank Asia chief strategist Zhang Jiantai said that considering the uncertainty of the US election, it is estimated that the yuan will need more time to break through the 6.74-6.75 resistance.
HSBC said it expects the yuan to dollar exchange rate to reach 6.7 by the end of this year, higher than its previous forecast of 6.95.
Morgan Stanley predicts that the yuan may appreciate to 6.6 by the end of 2021.
The Office of the Chief Investment Officer (CIO) of UBS Wealth Management expressed an institutional view that as the Chinese and Asian economies continue to recover, the RMB is expected to further appreciate to 6.8 before the end of the year and remain at around 6.7 in the first nine months of next year.
Based on recent interviews with traders, the market’s bullish sentiment towards the RMB is still strong, and its rise above the 6.8 mark has clearly stimulated the willingness of customers to settle foreign exchange orders. The bullish sentiment may continue to dominate the market in the short term. It remains to be seen whether expectations will diverge.
The above information is for reference only and does not constitute investment advice. Foreign traders are advised to carefully grasp the timing of foreign exchange settlement to ensure the minimum risk! After all, our main business is foreign trade, not foreign exchange speculation!
In addition, capable enterprises may wish to try the following practices to reduce losses caused by exchange rate fluctuations, including:
Signing fixed-price foreign exchange settlement with banks,
Forward foreign exchange Transactions (such as forward foreign exchange contracts DF or NDF),
foreign exchange swaps (such as cross-currency swap contracts CCS),
foreign exchange rate hedging and foreign exchange options business;
Or add a currency with a smaller appreciation of the local currency as a currency for trade exchange collection, etc.
Please also pay attention to this trend:
On the evening of September 18, six departments including the Central Bank, the National Development and Reform Commission, the China Banking and Insurance Regulatory Commission, the Ministry of Commerce, and the State Administration of Foreign Exchange jointly drafted the “About Further Optimizing Cross-Border RMB Regulations” Notice on Policies to Support Stabilizing Foreign Trade and Stabilizing Foreign Investment (Draft for Comments)” (hereinafter referred to as the “Draft for Comments”), aims to promote a higher level of facilitation of RMB settlement of trade and investment, further simplify the cross-border RMB settlement process, and further optimize cross-border RMB investment. A series of new policies have been introduced in five major areas, including financing management, facilitating individual current account RMB cross-border receipts and payments, and facilitating the use of RMB bank settlement accounts by overseas institutions, to promote trade and investment facilitation and attract global capital to increase investment in China.
Under today’s circumstances, foreign traders may wish to take the initiative to ask buyers whether they can pay in RMB. </p
