[Industry News]:[RMB, rising sharply!]

[The RMB has risen sharply!]#The RMB rises rapidly #On November 4, both the onshore and offshore RMB exchange rates increased significantly against the US dollar. Wind data showed that as of the close of 16:30 on November 4, the onshore RMB exchange rate against the US dollar was reported at 7.0974, recovering the "7.1" mark, up 276 basis points from the previous trading day, and the intraday high hit 7.0858.
The exchange rate of the offshore RMB against the US dollar, which more reflects the expectations of international investors, also showed a large increase. On November 4, it hit an intraday high of 7.0870 points and also recovered the "7.1" mark. The biggest increase in the day was once close to 500 basis points. As of press time, the exchange rate of the offshore RMB against the US dollar fluctuated slightly around "7.1".
Why did the RMB exchange rate rise? Zhu Hualei, senior investment consultant of Jufeng Investment, told a reporter from Securities Daily that the RMB rebounded relatively strongly against the US dollar on November 4. On the one hand, the US dollar weakened; on the other hand, a series of countercyclical policies recently launched by China have improved market expectations, enhanced the market's optimistic expectations for economic recovery and valuation repair, and also led to the inflow of international funds.
Wen Bin, chief economist of Minsheng Bank, told a reporter from Securities Daily that the US dollar index has risen sharply since October, rising from below 101 at the end of September to above 104. At present, the focus of foreign exchange market transactions is on the Federal Reserve's interest rate cut. The overall U.S. economic data performed strongly, the inflation rate unexpectedly exceeded expectations, and the market's expectations for the Federal Reserve's interest rate cut have been significantly lowered.
According to Timothy Tan, senior credit strategist at Bloomberg Industry Research, the Federal Reserve may be the only institution that can provide a bailout given the direction of the U.S. fiscal balance. However, the Fed's interest rate cut will have a negative impact. The Fed's sharp interest rate cut may drive arbitrage funds out of the U.S. market, thus weakening the liquidity support it has been providing. Without new sources of liquidity, U.S. financial stability may be threatened. In order to prevent asset prices from plummeting, the Federal Reserve may have to restart quantitative easing and act as the last provider of liquidity. The overall impact may be a significant weakening of the dollar.
As far as the RMB exchange rate is concerned, Wen Bin believes that in the short term, under the combined resonance of interest rate cuts and seasonal demand for foreign exchange settlement, the pressure on RMB depreciation will be significantly reduced at least by the end of this year and the beginning of next year.
Zhu Hualei believes that the RMB exchange rate is expected to remain within a narrow range in the short term, showing signs of stability and rising. (Securities Daily)