On December 8, the central price of RMB was 7.1123, up 53 points, and the median price for the previous trading day was 7.1176.
The probability that the Fed will keep interest rates unchanged in December is 97.5%
CME “Federal Reserve Watch”: The probability that the Fed will keep interest rates in the 5.25%-5.50% range in December is 97.5%, and the probability of raising interest rates by 25 basis points is 2.5%. The probability that interest rates will remain unchanged by February next year is 83.8%, and the probability of a cumulative interest rate cut of 25 basis points is 14.1%.
Guan Tao: The RMB exchange rate is now at a reasonable level
Guan Tao, global chief economist at BOC Securities, said at the “2023 Global Wealth Management Forum” that the RMB exchange rate is now at a reasonable level. Guan Tao said that whether it is fixed fluctuations or managed fluctuations, there are advantages and disadvantages. When the exchange rate is determined by the market, it will rise and fall, and it will not be a one-sided movement. Regardless of whether it rises or falls, the equilibrium exchange rate is not a point, but a range. “We adopted policy measures to stabilize the exchange rate in the early stages. Coupled with the improvement in the external market environment and marginal improvements in the domestic economy, the performance of the RMB exchange rate stabilized in November.”
The gap between China and the US continues to narrow, favors the performance of the RMB
Zhou Maohua, a macro researcher at the Financial Markets Department of Everbright Bank, said that the recent recovery in the RMB exchange rate against the US dollar is mainly due to the resonance of the following factors. First, the fall in US inflation has exceeded expectations, triggering market bets on the Fed's interest rate cuts next year. The spread between China and the US continues to narrow, favoring the performance of the RMB. Second, it is supported by domestic economic fundamentals. Since the beginning of September, the RMB exchange rate forecast has changed as more and more indicators have exceeded expectations, showing that the momentum for domestic economic recovery is increasing. Third, there are changes in supply and demand in the foreign exchange market. China's foreign trade has shown resilience. Foreign trade enterprise settlement demand has generally increased around the end of the year. Coupled with the gradual recovery of market sentiment, driving continued inflows of foreign capital, it also supports the RMB exchange rate.