Xie Yaxuan, chief Macro Analyst of China Merchants Securities, believes that if viewed from three to six months, the US dollar index is expected to continue to fall, while the RMB will continue to rise. The RMB has entered a clear appreciation cycle since the end of May. Although the fluctuation of RMB in this appreciation cycle will be relatively large, from the perspective of time trend, the RMB will show a general trend of appreciation on the whole.
The chief analyst of fixed income of CITIC Securities clearly analyzed that the strength of RMB exchange rate may still continue. However, considering the possible risks in the future, including global risk aversion, Sino US relations and asymmetric capital control, the RMB exchange rate may show a downward slope appreciation trend, and the short-term RMB exchange rate range may be 6.7-6.8.
On the impact of RMB appreciation on major asset investment, Li Haitao, a finance professor at Changjiang University of business, believes that in terms of commodities, the depreciation of US dollar often corresponds to the rise of commodity prices. As international commodities are priced in US dollars, the depreciation of US dollars causes the prices of corresponding commodities to rise. The logic mainly lies in: 1) the theory of purchasing power parity - depreciation of US dollar, commodities need higher prices to obtain the total purchasing power; 2) from the perspective of demand, the depreciation of US dollar increases the purchasing power of non US dollar currencies, and the demand increases; 3) from the perspective of supply, the depreciation of US dollar increases the non US dollar currencys purchasing power The marginal cost of production in Yuan area decreased. Judging from the above logic, commodities whose main output is not in the United States are more likely to rise in price due to the depreciation of the US dollar, such as iron ore and gold, while energy and agricultural products are relatively second.
In the stock market, the appreciation of RMB is conducive to capital inflow. The background of RMB exchange rate appreciation is mainly due to the poor economic expectation between China and the United States. Under the strong expectation of Chinas economy, foreign capital flows into China, while the profit growth of enterprises recovers, and currency liquidity is favorable to the domestic stock market. In terms of bond yield, RMB appreciation often corresponds to a stronger bond yield. The relationship between exchange rate and interest rate is mainly linked by capital flow and risk sentiment: 1) high interest rate attracts cross-border capital inflow and RMB exchange rate appreciates; 2) at the same time, high interest rate tends to suppress consumption and investment, resulting in current account surplus, foreign exchange supply exceeding demand and RMB appreciation; 3) RMB exchange rate continues to appreciate, cross-border capital continues to flow in, and money supply increases, resulting in interest rate Downward pressure. Of course, under the current situation that the RMB capital account is not fully opened, the cross-border capital inflow has very little impact on the interest rate. Basically, the interest rate affects the exchange rate. Only when the central bank does not want the exchange rate to continue to depreciate / appreciate but wishes to intervene, the exchange rate may have an impact on the interest rate. Source of this article: Yang Bin, editor in charge of the first finance and Economics_ NF4368
In the stock market, the appreciation of RMB is conducive to capital inflow. The background of RMB exchange rate appreciation is mainly due to the poor economic expectation between China and the United States. Under the strong expectation of Chinas economy, foreign capital flows into China, while the profit growth of enterprises recovers, and currency liquidity is favorable to the domestic stock market.