The rapid rise of the renminbi!

On November 4, the offshore RMB exchange rate rebounded against the US dollar, pulling up nearly 400 points in the short term and rapidly rising to the 7.10 mark; The onshore yuan recovered 7.13, 7.12, 7.11 and 7.10 successively. The dollar index fell by 0.55% in early trading and fell below 104. On Friday, the index also showed a large increase after the non-farm data came in well below expectations.

Zhou Maohua, a researcher with the financial markets department of Everbright Bank, said that the strong rebound of the RMB against the US dollar today is mainly driven by internal and external factors, the Shanghai Securities News reported. On the one hand, due to the introduction of a package of counter-cyclical policies, market expectations have improved significantly, and the market is optimistic about the prospects for economic recovery and market valuation repair, driving the inflow of peripheral funds; On the other hand, due to the volatility of the "Trump trade" in recent days, the market has eased pessimistic expectations for non-US currencies such as the euro, leading to a rise in the US dollar. 

Zhong Zhengsheng, chief economist of Ping An Securities, believes that the US economic data are mixed with joy and sorrow, but the overall resilience remains, providing some support for the dollar. However, the marginal cooling of the "Trump trade" has led to a convergence of the "strong dollar" trade. 

The recent increase in incremental policies has supported the renminbi against external headwinds. Guan Tao, global chief economist of Bank of China Securities, believes that the US dollar index recorded the largest monthly rise since 2024 in October, in this context, the pressure of RMB adjustment is significantly smaller than in the first half of the year, mainly due to the package of incremental financial and fiscal policies introduced and gradually landed since the end of September. Moreover, the domestic and foreign yuan trading price has risen above 7.10 since September 13, before the launch of a package of financial support policies on September 24. This indicates that the RMB exchange rate at that time had relatively fully reflected China's economic prospects before the steady growth policy was intensified. The aforementioned policy announcement and its initial effect have improved market expectations for China's economic recovery and further consolidated the foundation for a stable RMB exchange rate.