What’s The Exchange Rate Follow Up Trend?

- Jul 09, 2020-

RMB once broke 7! What's the exchange rate follow up trend?

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On July 6, the exchange rate of RMB against the US dollar rose successively through the four passes of 7.06, 7.05, 7.04 and 7.03 in the offshore and onshore markets, and the intra day increases of both onshore and offshore RMB against the US dollar were close to 500 basis points.

JUNON as an exporter of switches and sockets products, is pay attention to the rate every day.

 

On July 7, the central parity rate of the renminbi against the US dollar rose 353 basis points to 7.031, the highest since April 14, 2020, the largest increase since April 9, 2020. The offshore exchange rate rose to 6.9918 in the morning, the highest since March 18 this year, and recovered this important integer level for the first time after more than three months. At the same time, the onshore RMB exchange rate rose 155 basis points to 7.0034 in the morning, which was also close to the 7 round mark.

 

In the first half of this year, the onshore RMB was depreciated by 1.47% from 6.9632 yuan to 7.0654 yuan, while the offshore RMB was depreciated by 1.59% from 6.9592 yuan to 7.0690 yuan. Over the same period, the emerging market currency index fell 4.42%.

 

As for the future trend of the exchange rate, professional institutions have given their own forecasts:

 

Zong Liang, chief researcher of Bank of China, believes that in the context of global quantitative easing, maintaining stability of the RMB is the basic direction. "In this situation of relatively low global economic situation and unstable global capital and foreign trade, China's monetary policy and fiscal policy are stable, and the stable and upward trend of RMB is a big probability event." However, the analysis report of the Bank of China shows that there are also factors unfavorable to the trend of RMB exchange rate in the international situation in the second half of this year. Among them, Sino US relations are still the most uncertain variable. If the friction further escalates, it will increase the pressure on RMB to move and depreciate. On the whole, the RMB / USD exchange rate will remain stable in the second half of the year, and the two-way fluctuation range is expected to be large.

 

If the rate of appreciation is about to increase, it will be even worse for foreign traders! Hope JUNON Switch company can hold on and hope the worldwide economic environment will become better and better day by day.