The RMB continues to appreciate against the US dollar!

On October 11th, the People's Bank of China authorized the China Foreign Exchange Trading Center to announce that on October 11th, 2023, the central parity rate of the RMB exchange rate in the interbank foreign exchange market was 7.1779 yuan, compared to 7.1781 yuan on the previous trading day, with a daily increase of 2 basis points. The central parity rate of the Chinese yuan has appreciated slightly for three consecutive trading days.
The onshore and offshore RMB exchange rates have recovered by 7.30, fluctuating around 7.29. On October 11th, the opening price of onshore RMB was 7.2847, slightly higher than the closing price of the previous trading day; The offshore RMB opened at 7.2909, slightly lower than the previous trading day's closing price. As of 10:00 am on October 11th, the onshore RMB exchange rate against the US dollar was 7.2924, with a daily appreciation rate of 0.01%; The offshore RMB exchange rate against the US dollar was 7.2898, with a depreciation of 0.05% during the day.
Why does the RMB appreciate? Investment analyst Lin Dahui told the International Business Daily that this is because the recovery of the Chinese economy has performed well, and domestic and foreign investors have increased confidence in the Chinese market, which has triggered a demand for purchasing the renminbi. In addition, the market also has doubts about the credit of US bonds, leading to a return of funds.
Regarding the continuous trend of the RMB, CITIC Securities Research Report pointed out that the recent trend of the offshore/onshore RMB exchange rate has stabilized, so more attention needs to be paid to marginal changes in the short term. At the beginning of October, domestic economic data will be intensively disclosed, and if the repair of economic fundamentals is verified by data, it may provide support for the RMB exchange rate.
From a medium to long-term perspective, the core of the exchange rate still lies in fundamentals. If market expectations for the future economy turn warmer, coupled with the Federal Reserve's interest rate hike cycle coming to an end, it may lead to the repair of direct investment accounts and securities investment accounts, and there may be a possibility of further rebound in the RMB exchange rate at that time.