RMB Goes Up With The Trend; Otherwise, There Is Limited Room For Appreciation

On Wednesday (April 20), the intraday contraction of the RMB against the US dollar rose, and the overnight US dollar index significantly declined, pushing the central parity rate to a new four month high.

The US dollar/RMB inquiry system reported 6.4635 at noon and 6.4722 on Tuesday. The central bank fixed the dollar/yuan central parity rate at 6.4579, and the central parity rate on Tuesday was 6.47. The spot turnover of RMB against the US dollar was US $9.374 billion, compared with US $10.2 billion on Tuesday.

On the overseas non deliverable forward foreign exchange (NDF) market, the latest dollar/yuan one-year variety was reported at 6.6420, and it was 6.6358 late Tuesday. Offshore in Hong Kong USD/RMB The latest spot price was 6.4725 and 6.4682 at the end of the previous trading day.

The reference exchange rate of RMB against USD updated by China Foreign Exchange Trading Center at 11:00 today is 6.4631.

The RMB CFETS index calculated by Reuters continued to fall to 97.30 on Wednesday, a record low, and has fallen 2.7% since the end of 2014.

In the international exchange market, the Australian dollar, Canadian dollar and other commodity currencies fell from their recent highs on Wednesday, as the rise of crude oil prices stalled after the end of the Kuwaiti oil workers' strike.

Traders said that the recovery of risk appetite depressed the long position of the US dollar, and the RMB rose along the trend, but it was still not separated from the previous Fluctuation range , unless the US dollar remains weak, the RMB will continue Appreciation space Relatively limited.

The traders also pointed out that recently, the bilateral exchange rate of RMB against the US dollar has remained stable as a whole, while the RMB Exchange Rate Index (CFETS), which refers to a basket of currencies, has been declining, which is conducive to improving China's terms of trade; If the US dollar becomes stronger again in the future, we can also adopt the idea that the bilateral exchange rate is basically stable while the CFETS index is relatively strong to provide space for exchange rate adjustment.

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German Deputy Prime Minister Sigmar Gabriel said that the European Central Bank has reached the limit of stimulus measures and called on the government to increase spending.

He said on Wednesday: "The European Central Bank has become an acting economic department, but its responsibility is not the same. Its only tool is printing money. Whenever the EU's financial investment and growth momentum are insufficient, the European Central Bank will provide a lot of liquidity."

Gabriel said that although the policy of the European Central Bank has shrunk the deposits of many Germans due to low interest rates, Draghi should not be regarded as a bad person. He believes that the European Central Bank only responds to the low interest rate environment in Europe, which has experienced years of fiscal tightening.

In fact, Germans have long been dissatisfied with the ultra loose policy of the European Central Bank. Wall Street has mentioned before that the idea that ECB President Draghi said last month that "helicopter scatters money" is a very interesting concept. His statement provoked a thousand waves, making Germany, which has long been dissatisfied with the European Central Bank's low interest rate easing policy, strongly oppose it.

Draghi said last month that the idea of "helicopter dropping money" was a very interesting concept. Although Draghi and his colleagues stated that they had not discussed this strategy as a policy option, this statement still caused protests in Germany. Germany's policy attack on the European Central Bank seems to have escalated.

Der Spiegel An unnamed source from the German Ministry of Finance was quoted as saying that if the European Central Bank resorts to the extreme monetary easing policy of "helicopter" throwing money at the people of the euro area, the German government will consider asking the court to distinguish the responsibilities and authorities of the European Central Bank at the legal level.

However, the European Central Bank's Vice President Constancio and Executive Committee Praet said earlier this month that "helicopter spending" to stimulate spending and inflation was not considered, in order to calm the German opposition. But the effect seems to be poor. Since this month, a large number of German conservative politicians have criticized the position of the European Central Bank.