RMB Spot Exchange Rate Hit Three Month Low

In the international market, the US dollar rose and the domestic oil market purchased more foreign currencies. In December 4th, the spot exchange rate of RMB against the US dollar weakened significantly, and the intraday and closing prices both hit the lowest level since the end of August. Market participants say that the short term renminbi is still weakening, but the space for depreciation is still limited.

On the 4 day, the central parity of the RMB against the US dollar was 6.1411, down 35 basis points over the 3 day, down for second consecutive trading days, and a 86 basis point on the two day. Overnight, in the international foreign exchange market, as crude oil prices continued to fall to a five year low, the Fed's interest rate rise is expected to rise, and the US dollar index is up 0.35% throughout the day, hitting 89 at its highest level since March 11, 2009.

On the 4 day spot foreign exchange market, the spot exchange rate of RMB against the US dollar opened slightly lower after the concussion, the lowest hitting 6.1599 in the intraday market, closing at 6.1546 in the tail market, and 46 basis points or 0.07% lower than the 3 day closing price. Since the central bank announced its interest rate cut in November 21st, the renminbi has been on the spot against the US dollar. Exchange rate The performance is generally weak. From November 24th to December 4th, Closing price The calculated spot exchange rate has depreciated by 297 basis points, with a range of 0.48%.

Market participants pointed out that RMB The exchange rate is mainly dominated by the market, and the US dollar continues to strengthen and the crude oil decline leads to an increase in the number of foreign exchange purchases. In addition, after the central bank cut interest rates, market easing expectations continued to rise. The cyclical differences between China and the US monetary policy also increased the downward pressure on RMB to some extent.

In the aftermarket, under the background of the gradual withdrawal of the central bank's intervention, the RMB is still weak in the short term. But with the overall stabilization of the central parity in the vicinity of 6.14, the acceleration of RMB internationalization process and the high trade surplus, the space for RMB to continue to depreciate further is also limited.

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The yuan is expected to lower for second consecutive weeks as the market expects China's central bank to stimulate growth in Asia's largest economy to further ease monetary policy.

The Central Bank of China failed to withdraw funds from the financial system this week after its first interest rate cut last month in 2012. Bank of America and Eastern Bank of China expect the Central Bank of China to lower the reserve requirement ratio of banks. Barclays predicts that the central bank will lower interest rates again. Data released this week show that China's manufacturing sector decelerated in November. It is estimated that the data released in December 8th will show a slowdown in export growth.

Lin Qiaoji, CO head of Hongkong agricultural research, said many people now expect the central bank to cut interest rates or reduce the deposit rate; if liquidity increases, the renminbi may depreciate. Easing policy is a sign of economic weakness, which will reduce market confidence in RMB.

According to data from China foreign exchange trading center, the yuan fell 0.12% against the dollar this week and 12:50 at 12:50 Beijing time. The central bank today raised the central price by 0.06% to 6.1373.