offshoreRMBThe exchange rate recorded its largest ever hike on Wednesday, bullish as investors expected the US Federal Reserve to slow the pace of interest rate hikes and Chinese banks sold dollars.
According to Bloomberg, offshoreRMBThe exchange rate rose 1.8% in intraday trading Wednesday, climbing toRMB On Thursday, at 7.1917 yuan per dollar, it was flat at 7.1870 yuan in Asian ground tradingRMBAgainst the US dollar, it closed at 7.1710 yuan on Wednesday evening, up 942 basis points.
A foreign exchange trader at a Hong Kong bank said:RMBThe sharp rise in the exchange rate started Wednesday at 3pm. At first, the foreign exchange market assumed that the affected Chinese departments would enter the market.RMB, which suddenly triggered a massive wave of short coverage. “
Stephen Chiu, Asia FX chief and Bloomberg rates strategist, said:RMBThe bulls are that state banks could step in and the dollar is generally lower in recent daysRMBAfter a rapid depreciation, there are some signs of short-term stabilization.
Data released by the US recently showed that the manufacturing index, house prices and consumer confidence were not as good as economists predicted, indicating that the Fed’s tightening of monetary policy has started to show results, pushing investors to expect the Fed to slow down the pace of interest rate hikes.
Fed officials have also been more cautious recently, such as Federal Reserve Bank of San Francisco President Daly last week who said the Fed should start planning to cut rate hikes.
Wang Qing, macro analyst at Oriental Jincheng, said that even if the Fed drastically hiked interest rates in November, this would lead toRMBThe exchange rate is under pressure again and the relevant Chinese authorities still have sufficient “exchange rate stabilization” tools to ensureRMBThe exchange rate is constantly fluctuating at a reasonable and balanced level of exchange, including the broadening of the scale of the central bank’s bill issuance in the Hong Kong market, the tightening of offshore billsRMBLiquidity, by lowering the macroprudential adjustment factor for loans to businesses abroad, restarting the countercyclical factor and lowering the reserve ratio in foreign currency.
