Views: 0 Author: Site Editor Publish Time: 2025-07-22 Origin: Site
Since May, the RMB exchange rate has continued to perform brightly.
The onshore RMB has appreciated more than 700 pips to near 7.18 against the US dollar, a gain of about 1%. At one point during the period, the onshore yuan exchange rate surged to 7.16 at the May 26 morning open.
Target price 7.0!
As of 9:00 on May 28, the domestic and foreign exchange rate of the dollar against the yuan hovered around 7.195 and 7.188, not only strong recovery of 7.2 integer mark, this week also once hit the highest value of 7.167 and 7.1608 since last December.
One point of concern is that the current foreign offshore market RMB exchange rate and the RMB mid-price appeared “big reversal”.
Previously, by the U.S.-China trade disputes and other factors, the middle price of the renminbi exchange rate in early April compared with the foreign offshore market renminbi exchange rate was higher than more than 1,300 basis points, but this week, the foreign offshore market renminbi exchange rate once “exceeded” the renminbi exchange rate, such as the offshore renminbi exchange rate on May 27, the highest rose to 7.1703, higher than the On May 27, for example, the offshore RMB exchange rate rose to 7.1703, more than 170 basis points higher than the RMB middle price of 7.1876 on the same day.
What does this mean? Whenever the RMB mid-price is higher than the offshore RMB exchange rate, it shows that overseas capital is bearish on the RMB exchange rate; on the contrary, it means that overseas capital has turned bullish on the prospects of RMB appreciation.
Since this year, most of the Asian currencies and the euro against the U.S. dollar appreciation of 5% -10%, while the yuan from the beginning of the year to the beginning of May, less than 2%, the current foreign exchange market for the yuan to make up for the expectations continue to heat up. More and more Wall Street investment institutions in the yuan exchange rate valuation model, significantly increase the weight of China's foreign trade surplus factor, the next three months period of the yuan exchange rate is expected to approach the “7” forecast.
Recently, Goldman Sachs adjusted its 12-month target price for the yuan against the U.S. dollar to 7.0. This week Goldman Sachs released another research report titled “The Renewal of the Yuan,” in which it expects the exchange rate for the next three, six and 12 months to be adjusted to 7.2, 7.1, and 7.0, respectively, from the previous figures of 7.3, 7.35, and 7.35. This implies that the yuan's rate will rise by 3 percent over the next 12 months.
Foreign trade enterprises are busy with foreign exchange settlement
Foreign trade is the basis of foreign exchange, foreign exchange is the guarantee of foreign trade.
A driving force behind the recovery of the domestic and foreign yuan 7.2 round number mark, is the market for Chinese companies to the United States “grab exports” to hold very high expectations.
Barclays recently assessed the potential upside for currencies in Asian exporting economies and identified which markets could see more settlement behavior, especially if local exporters hold large amounts of dollars.
Barclays macro, foreign exchange strategist Zhang Meng told reporters that China in the settlement of foreign exchange facing the “vulnerability” is the largest, and in the entire Northeast Asian region, South Korea's settlement risk is the smallest. She analyzed that, according to China's foreign exchange settlement and transaction data, estimates that Chinese enterprises may have about 100 billion U.S. dollars of potential dollar settlement flow.
The current exporter panic settlement is more prominent in China and Taiwan trading enterprises. from March to early May, the cumulative appreciation of the NT dollar against the U.S. dollar was 10%, and the appreciation in the early days of the month was as high as 6%, coupled with Taiwan's monetary policy authorities did not intervene (in the past, they routinely controlled the pace of the NT dollar's appreciation), and exporters panicked to settle their foreign exchange accounts in the face of the strong expectation of NT dollar appreciation.
The latest data released by the State Administration of Foreign Exchange (SAFE) showed that the settlement rate, which measures the market's willingness to settle foreign exchange, was 64.4% in April, up 6.9 percentage points from a year earlier.
What about you? Would you choose to settle your foreign exchange immediately now?
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