The offshore RMB may be difficult to break 7
The offshore RMB may continue to depreciate, but the extent is limited, and it may be difficult to break 7.
Under the expectation of the appreciation of the US dollar, non-US currencies are generally weak against the US dollar, and the offshore RMB has to depreciate. RMB to remain generally "stable and volatile" in past 10 years. The intention of the Chinese central bank to lead the easing of the domestic economic environment is apparent. China's positive foreign trade figures were favorable to the appreciation of the offshore RMB.
The market has now anticipated and priced in Powell's likely hawkish bias at the Jackson Hole Economic Symposium this weekend (25-27 August) from 11 August to 23 August. As a result, the USD index has risen by 4.5% (104.30 - 109.00). In the medium to long term, the author believes that it is unlikely that the offshore RMB will depreciate significantly. The CNH/USD will continue to depreciate for the rest of the year, driven by the rising USD, but it may be more challenging to break 7.0000. CNH/USD may be expected to depreciate with a high probability to the max range of 6.900- 6.9500 in the rest of the year, then it is more likely to resume appreciation to around 6.5750.
Under the expectation of the appreciation of the US dollar, non-US currencies are generally weak against the US dollar, and the offshore RMB has to depreciate. RMB to remain generally "stable and volatile" in past 10 years. The intention of the Chinese central bank to lead the easing of the domestic economic environment is apparent. China's positive foreign trade figures were favorable to the appreciation of the offshore RMB.
The market has now anticipated and priced in Powell's likely hawkish bias at the Jackson Hole Economic Symposium this weekend (25-27 August) from 11 August to 23 August. As a result, the USD index has risen by 4.5% (104.30 - 109.00). In the medium to long term, the author believes that it is unlikely that the offshore RMB will depreciate significantly. The CNH/USD will continue to depreciate for the rest of the year, driven by the rising USD, but it may be more challenging to break 7.0000. CNH/USD may be expected to depreciate with a high probability to the max range of 6.900- 6.9500 in the rest of the year, then it is more likely to resume appreciation to around 6.5750.
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