The continuing strong gains as the devaluation of the renminbi is under increasing pressure.
As of November 14, at 20 o'clock, under the influence of US dollar index was above 100 integer points, domestic market the dollar spot rate hovered near 6.8415 plate has reached a 7-year low recently 6.845; Hong Kong dollar-Yuan exchange rate is hitting 6.8507 offshore, also hit a record intraday low of 6.8551, middle price of RMB on the day at 6.8291, hitting a nearly 6-year low.
"For now, the concern in financial markets from the United States turned to the Fed's December rate hike expectations in the presidential election, the dollar index continued to rise, invisible exacerbate devaluation pressure. "A Hong Kong Bank foreign exchange dealer said.
Latest data show that as of the week ending November 11, CFETS RMB exchange rate stood at 94.33, up 0.55 a week earlier.
"It seems to reflect the Chinese Central Bank's latest Renminbi exchange rate management policy. "These currency traders think banks in Hong Kong, with the Fed rate hike in December expected to continue, the Central Bank raised interest rates move in the dollar ahead of the release on the occasion of RMB devaluation pressure, and can reassure market fears of a disorderly devaluation of the Renminbi. More importantly, with the Yuan against a basket of currency stability, the functions of the Central Bank intends to build the safe-haven currency, attracting international financial institutions will be more renminbi into non-US currency asset pool.
The dollar was weaker Yuan "behind"
Many foreign exchange traders noted that after Trump was elected United States financial markets after the great earthquake of the early Presidents, currently the focus of financial markets, have turned to Trump policy advocates will much positive effect on the dollar.
"Compared to Trump advocates protectionist foreign policies, he emphasized that the expansion of investment in infrastructure construction and employment of domestic policy, and improve the United States level of inflation and economic growth, but to accelerate the pace of raising interest rates and continuing strong. "Head of currency strategy at Nomura Hafiz (Bilal Hafeez) to the 21st century business Herald reporter said.
The latest data also showed that Fed rate hike in December briefly dropped below 50% the early chances in the presidential election results, has now returned to more than 80%.
Meanwhile, many international investment institutions from historical data found in 1981-1984, the basis of the continued strength of the dollar--the Reagan-era, when the United States economy is in recession, United States Government bold fiscal stimulus policies and to support the Federal Reserve continues raising interest rates, the dollar is up about 60%. Now Trump, head of United States also take interest rates and fiscal stimulus, history could repeat itself again.
Fu Tuo gumier·aihemaide, Chief market analyst of the foreign exchange group to the 21st century business Herald said, which completely change the way financial institutions against the dollar – they think in the past Fed rate hikes may not be able to let the dollar index break through the 100 integer points, tend to adopt a policy of every high selling of the dollar to take profits. Now, with Trump, a series of administration and their ideas to accelerate the pace of rate hikes and continuing to appreciate, they began to think that the dollar index will hold above 100 integer points, making the dollar cycle throughout the cycle.
"There are already so many financial institutions believe that the dollar will break through at the end of 102, next year may reach above 105. "He said this invisible exacerbate devaluation pressure.
Many currency traders said this downward pressure is particularly strong in the offshore RMB market. Recently, many Chinese companies are increasing purchase amount in the offshore market, preferring to take higher risks "Cap forward" option combination lock the offshore renminbi-dollar cost in advance. The reason, is a territory of capital controls so that they are difficult to obtain dollars in the territory, their offshore holdings into dollars for trade and investment expenditure, secondly, devaluation pressure surges made them strongly against the dollar safe-haven demand.
In the foreign exchange traders, which contributed RMB offshore market fell even more, and then drag on the domestic market the Yuan continued to fall.
"It should be said that there is an invisible hand of the market. "One currency trader said. Except November 9 United States President election day both inside and outside Yuan meeting poor space once over 300 a basis points, remaining time this meeting poor space always was control in 200 a basis points within, this phenomenon exists with double edged sword effect--benefits is speculation capital arbitrage trading unprofitable, helps ease Yuan speculation sell empty of pressure; harm is is territory Yuan exchange rate often was outside Yuan exchange rate "led with nose go"--followed fell, continuous below in recent years low.
"However, the rapid rise in the Yuan continued downward pressure from the dollar, speculative selling of the Yuan capital is not active, because China's economic growth fundamentals and capital controls so that they don't see the opportunity to bet on the Yuan fell sharply. "He said.
Drop the "bottom line"
21st century business Herald reporter also learned from the many currency traders, although the 14th Yuan below 6.84 last 7-year low against the dollar, but the market did not find traces of China's Central Bank intervened to support its currency.
"14th not see traces of big Chinese banks selling dollars, but foreign banks ' proprietary disk in every high selling dollars, they seem to think the dollar index may not be able to hold 100 integer points. "A State-owned bank foreign exchange trader pointed out to the 21st century business Herald reporter.
This market speculation, as Trump may promote protectionist policies and the inclusion of RMB exchange rate manipulator, did not rule out China's Central Bank relaxed the exchange rate management, and acquiescence of the Yuan while the dollar slid December interest rate hike expectations sharply to release pressure in reducing unnecessary trade friction in the future at the same time, new game room for the US-China trade talks.
However, this view is questioned by many domestic financial institutions.
A private equity trading Executive believes that China's Central Bank does not intervene, it does not mean relaxing the RMB exchange rate management. In fact, the Yuan domestic foreign exchange margin space has always been maintained at 200 basis points less than speculative carry trade is unprofitable, this may be the result of the Central Bank to strengthen the management of onshore and offshore RMB exchange rate, while from among recent price trends analysis, Central Bank intends to guide the CFETS remained relatively stable against a basket of currencies, even allowed the Yuan against a basket of currencies rose slightly.
"This quietly to the currency decline has set a bottom line. "He pointed out. This strategy of benefits, a is let Yuan in ahead of release dollars raised interest rates by brings of devaluation pressure while, market without worried Yuan exchange rate disorder sharply fell; II is through expanded Yuan exchange rate fluctuations interval (one-day price over 200-300 a basis points), further solution Exchange to out clear of problem, sharply ease enterprise hedge purchased meeting pressure; three is in dollars raised interest rates led to non-beauty currency collective sharply fell while, Yuan against a basket currency exchange rate through slightly rose, Can effectively enhance the currency's safe-haven properties, attracting international financial institutions would pool more renminbi into non-us currencies as a reserve currency.
Et finance Research Institute Chief Economist at Renmin University he fan believes that this round of devaluation pressures from the outside, don't panic. The short term, should pay attention to Fed rate hikes could trigger market volatility; the long term, the Central Bank should continue to speed up the reform and let the Yuan exchange rate to float freely as soon as possible, to eliminate the root causes devaluation expectations.
As of November 14, at 20 o'clock, under the influence of US dollar index was above 100 integer points, domestic market the dollar spot rate hovered near 6.8415 plate has reached a 7-year low recently 6.845; Hong Kong dollar-Yuan exchange rate is hitting 6.8507 offshore, also hit a record intraday low of 6.8551, middle price of RMB on the day at 6.8291, hitting a nearly 6-year low.
"For now, the concern in financial markets from the United States turned to the Fed's December rate hike expectations in the presidential election, the dollar index continued to rise, invisible exacerbate devaluation pressure. "A Hong Kong Bank foreign exchange dealer said.
"It seems to reflect the Chinese Central Bank's latest Renminbi exchange rate management policy. "These currency traders think banks in Hong Kong, with the Fed rate hike in December expected to continue, the Central Bank raised interest rates move in the dollar ahead of the release on the occasion of RMB devaluation pressure, and can reassure market fears of a disorderly devaluation of the Renminbi. More importantly, with the Yuan against a basket of currency stability, the functions of the Central Bank intends to build the safe-haven currency, attracting international financial institutions will be more renminbi into non-US currency asset pool.
The dollar was weaker Yuan "behind"
Many foreign exchange traders noted that after Trump was elected United States financial markets after the great earthquake of the early Presidents, currently the focus of financial markets, have turned to Trump policy advocates will much positive effect on the dollar.
"Compared to Trump advocates protectionist foreign policies, he emphasized that the expansion of investment in infrastructure construction and employment of domestic policy, and improve the United States level of inflation and economic growth, but to accelerate the pace of raising interest rates and continuing strong. "Head of currency strategy at Nomura Hafiz (Bilal Hafeez) to the 21st century business Herald reporter said.
The latest data also showed that Fed rate hike in December briefly dropped below 50% the early chances in the presidential election results, has now returned to more than 80%.
Meanwhile, many international investment institutions from historical data found in 1981-1984, the basis of the continued strength of the dollar--the Reagan-era, when the United States economy is in recession, United States Government bold fiscal stimulus policies and to support the Federal Reserve continues raising interest rates, the dollar is up about 60%. Now Trump, head of United States also take interest rates and fiscal stimulus, history could repeat itself again.
Fu Tuo gumier·aihemaide, Chief market analyst of the foreign exchange group to the 21st century business Herald said, which completely change the way financial institutions against the dollar – they think in the past Fed rate hikes may not be able to let the dollar index break through the 100 integer points, tend to adopt a policy of every high selling of the dollar to take profits. Now, with Trump, a series of administration and their ideas to accelerate the pace of rate hikes and continuing to appreciate, they began to think that the dollar index will hold above 100 integer points, making the dollar cycle throughout the cycle.
"There are already so many financial institutions believe that the dollar will break through at the end of 102, next year may reach above 105. "He said this invisible exacerbate devaluation pressure.
Many currency traders said this downward pressure is particularly strong in the offshore RMB market. Recently, many Chinese companies are increasing purchase amount in the offshore market, preferring to take higher risks "Cap forward" option combination lock the offshore renminbi-dollar cost in advance. The reason, is a territory of capital controls so that they are difficult to obtain dollars in the territory, their offshore holdings into dollars for trade and investment expenditure, secondly, devaluation pressure surges made them strongly against the dollar safe-haven demand.
In the foreign exchange traders, which contributed RMB offshore market fell even more, and then drag on the domestic market the Yuan continued to fall.
"It should be said that there is an invisible hand of the market. "One currency trader said. Except November 9 United States President election day both inside and outside Yuan meeting poor space once over 300 a basis points, remaining time this meeting poor space always was control in 200 a basis points within, this phenomenon exists with double edged sword effect--benefits is speculation capital arbitrage trading unprofitable, helps ease Yuan speculation sell empty of pressure; harm is is territory Yuan exchange rate often was outside Yuan exchange rate "led with nose go"--followed fell, continuous below in recent years low.
"However, the rapid rise in the Yuan continued downward pressure from the dollar, speculative selling of the Yuan capital is not active, because China's economic growth fundamentals and capital controls so that they don't see the opportunity to bet on the Yuan fell sharply. "He said.
Drop the "bottom line"
21st century business Herald reporter also learned from the many currency traders, although the 14th Yuan below 6.84 last 7-year low against the dollar, but the market did not find traces of China's Central Bank intervened to support its currency.
"14th not see traces of big Chinese banks selling dollars, but foreign banks ' proprietary disk in every high selling dollars, they seem to think the dollar index may not be able to hold 100 integer points. "A State-owned bank foreign exchange trader pointed out to the 21st century business Herald reporter.
This market speculation, as Trump may promote protectionist policies and the inclusion of RMB exchange rate manipulator, did not rule out China's Central Bank relaxed the exchange rate management, and acquiescence of the Yuan while the dollar slid December interest rate hike expectations sharply to release pressure in reducing unnecessary trade friction in the future at the same time, new game room for the US-China trade talks.
A private equity trading Executive believes that China's Central Bank does not intervene, it does not mean relaxing the RMB exchange rate management. In fact, the Yuan domestic foreign exchange margin space has always been maintained at 200 basis points less than speculative carry trade is unprofitable, this may be the result of the Central Bank to strengthen the management of onshore and offshore RMB exchange rate, while from among recent price trends analysis, Central Bank intends to guide the CFETS remained relatively stable against a basket of currencies, even allowed the Yuan against a basket of currencies rose slightly.
"This quietly to the currency decline has set a bottom line. "He pointed out. This strategy of benefits, a is let Yuan in ahead of release dollars raised interest rates by brings of devaluation pressure while, market without worried Yuan exchange rate disorder sharply fell; II is through expanded Yuan exchange rate fluctuations interval (one-day price over 200-300 a basis points), further solution Exchange to out clear of problem, sharply ease enterprise hedge purchased meeting pressure; three is in dollars raised interest rates led to non-beauty currency collective sharply fell while, Yuan against a basket currency exchange rate through slightly rose, Can effectively enhance the currency's safe-haven properties, attracting international financial institutions would pool more renminbi into non-us currencies as a reserve currency.
Et finance Research Institute Chief Economist at Renmin University he fan believes that this round of devaluation pressures from the outside, don't panic. The short term, should pay attention to Fed rate hikes could trigger market volatility; the long term, the Central Bank should continue to speed up the reform and let the Yuan exchange rate to float freely as soon as possible, to eliminate the root causes devaluation expectations.
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