The European Central Bank announced that the dollar fell more than 5500 points in one hour
In less than an hour, the U.S. dollar plunged more than 5500 points.
According to the data, at around 22:13 p.m. Beijing time last night, the U.S. dollar index fell all the way from 97.1584. In less than an hour to around 23.07, the dollar index fell 5535 basis points to 96.6049, below the 97 mark. It then fell slightly to 96.5774, the lowest level since March 13 this year. Although the dollar index rose slightly in late trading, it did not break the 97 mark.
Some analysts pointed out that the sharp drop in the dollar index was due to the ECBs announcement of a more than expected purchase plan. Especially after Germany launched a large-scale economic stimulus plan. The market is now betting less on the risk of the euro zones tail.
Tempus, the US foreign exchange trading platform, said on Thursday that the US dollar exchange rate was relatively calm overnight, but the European Central Banks decision to expand bond purchases boosted market sentiment and reduced the demand for safe haven currencies, and the US dollar came under pressure again.
Zhao Qingming also believes that the overall strength of the dollar since this year is due to the fact that for most investors around the world, the dollar is still the main safe haven currency. But over time, the impact of the epidemic on the global economy has become more and more clear. The return to work in Europe is better than that in Europe, which has also led to the strength of many non US currencies.
There are not many factors supporting the continued strength of the US dollar, and the overall trend of the future weakness of the US dollar will continue. Zhao Qingming believes that the Federal Reserves monetary policy is more radical than other major economies, but the recession is also relatively serious than other countries. Its hard for the dollar to stay strong.
RMB is now appreciating slightly, and its hard to go against the trend when the US dollar weakens
With the weakening of the US dollar, the exchange rate of RMB also appreciated slightly today. According to the data, todays central parity rate of RMB is 7.0965, up 47 basis points from the previous trading day. After opening, although the onshore RMB exchange rate appreciated at the beginning of opening, there was a slight depreciation again. The lowest depreciation was 7.1145, 79 basis points lower than yesterdays closing price.
In fact, the RMB exchange rate has been relatively weak in recent two weeks. Market expectations are also relatively negative. However, some people in the industry believe that the RMB exchange rate is difficult to significantly weaken against the trend when the dollar is generally weak.
The trend of the RMB exchange rate will be affected by the international trend, and the depreciation of the RMB exchange rate will not be too large under the circumstances of the overall weakening of the US dollar and the continuous strengthening of non US currencies. Zhao Qingming believes that, however, some measures taken by the United States against Chinese enterprises such as Huawei have worried the international market, and the expectation of the foreign exchange market has turned pessimistic. However, in terms of the domestic market, Chinas epidemic situation has been effectively controlled, and the view that there is no devaluation basis for the RMB has once again become universal.
In fact, many overseas institutions have begun to pay attention to and increase the allocation of Chinese assets. In early May, the regulations on the management of domestic securities and futures investment funds of overseas institutional investors began to play a positive role, and a new round of RMB bond buying by overseas institutions was launched.
According to the latest data of Bond Custody in May released by the Central Clearing Company, the face value of RMB bond custody of overseas institutions in that month reached 2113.072 billion yuan, an increase of 111.936 billion yuan on month compared with April.
Source: Financial Association editor in charge: Chen Hequn_ NB12679