Will the RMB yuan exchange rate against the dollar "break 8"? !

The RMB exchange rate in the recent period encountered a substantial depreciation, once set a 10-year low! 

But these two days, the RMB depreciation momentum also has no sign of releasing aid, easily broke through 1:7.1. On May 28th it hit 7.1964 at one point, followed by a slowdown in the renminbi and a rebound. As of the close, the yuan was 1:7.1364 against the dollar. Experts say the yuan is likely to continue to fall against the dollar in the short term and investors should be cautious about bottoming out.
 Now, everyone is looking for the reason why the yuan has plummeted? The main reasons for our analysis are as follows: first, the moderate depreciation of the RMB exchange rate is beneficial to Chinese export enterprises. Affected by the new crown epidemic, the European and American market demand plummeted, a large number of orders were canceled. At the same time, developing countries such as Russia, India, Brazil, and Argentina have also experienced outbreaks, and economic growth has also been affected by the epidemic. In order to enhance the competitiveness of China's exports in this special period and ease the export pressure of export commodities, it is necessary for China to keep the RMB exchange rate in a relatively low position.

 Moreover, domestic monetary policy is generally loose. After the outbreak, the domestic economy was restarted and investment plans for infrastructure projects were launched. This year has been several domestic cut, interest rate cuts, and our central bank has said that the follow-up cut, there is room for interest rates. It is clear that domestic monetary policy will continue to be looser in order for the economy to recover in the second half of the year, and in each case, the depreciation of the renminbi is expected

•  Finally, the outbreak of the new crown has brought uncertainty to the global economy, the European and American economies are depressed, and China's economic recovery is still some time. As a result, a large number of hot money are holding dollars to avoid risk, which led to the recent global "dollar shortage ", and the continued strength of the dollar index, always hovering between 98-100 high, which also led to a sharp fall in non-US currencies, and the dollar and the yuan exchange rate showed a negative correlation, so the yuan exchange rate has a trend decline.
•  Are many now worried that the yuan will fall below 8% against the dollar? I think this worry is superfluous. First, the current RMB has accelerated the pace of internationalization. On the one hand, Chinese A stocks are officially listed in international indexes such as MSCI, and some overseas hedge funds will flow into China through QFII、RQFII and other channels for asset allocation. On the other hand, China has launched the Shanghai crude oil and gold futures market, which is priced and settled in RMB. This will greatly promote the internationalization of the yuan, driving up the demand for the yuan for overseas investors, thereby promoting the appreciation of the yuan.
•  Second, the U.S. is also reluctant to see the U.S. dollar index continue to be strong, the yuan continued to decline. Because a rapid depreciation of the yuan's exchange rate would improve the competitiveness of Chinese goods. In the current global recession, the United States still wants the dollar index to depreciate and the yuan to appreciate, thus increasing the competitiveness of American goods exports. If the yuan continues to fall, it is believed that the United States will control the dollar's appreciation process. So, the RMB exchange rate against the dollar depreciation space will not be too much, let alone go to "break 8". 
•     Third, only if the RMB exchange rate remains relatively stable can it benefit China's economic development. Moreover, China's RMB exchange rate is not completely market-oriented, China in addition to more than 300 million foreign reserves, there are many instruments to regulate exchange rate fluctuations. such as reverse repurchase factors, issuing central tickets in offshore markets, tightening loose monetary policy, and so on. As long as the state is willing to do so, it can contain the trend of the RMB exchange rate falling continuously. So, we think there may still be a fall in the yuan, but the probability of "breaking 8" is basically zero.
•  After entering May, the renminbi has fallen all the way, especially in recent days, when it has fallen to record lows. The main reason is that the dollar has become a safe-haven currency, the dollar index is hovering high, plus China's monetary policy continued easing, which has increased the rate of depreciation of the renminbi. Although the renminbi has fallen sharply, it is impossible to "break 8 ;. Now all parties hope that the yuan exchange rate will be stable, which is conducive to the internationalization of the yuan, conducive to the recovery of China's economy, and the Central Bank of China is fully capable of stabilizing the yuan exchange rate and stabilizing the exchange rate in a large box.

• As an injection mold company foreign trade company, the depreciation of RMB is good for us, if the economy is not good, I believe the RMB break 8 will appear

RMB and US dollar showdown

2015. 12.3 night, a trillion dollar profit levels of the Holocaust occurred.

The people expected of the Holocaust

  The European Central Bank cut interest rates evening, as well as many economic scholars including Chinese big reversal for the dollar, the devaluation of the yuan long advocated, more real space next to those of the US capital predators, sent a huge brainless opponents dish, because there You do not have to spend money to lure more.

      The dollar index, rose and then fell, from a high of 100.47, plummeted to a little over 97, down 2.2%. Created since March 2009, which is the biggest decline in almost six years. Was the outbreak of the subprime crisis, the dollar index single-day decline of 2.9%. Even worse is that this crash, after the ECB cut interest rates, we would have expected, the dollar would like to take this opportunity to create recovery highs yet again.

Why is there such a result seems inconsistent with the logic of it?

 Logic never wrong, the wrong people

  In fact, it never appears opposite logic with real financial logic, if that trend and as expected, can only be predicted logically wrong. The dollar index is down not up, the logic behind it is that I have been talking about, the dollar index is currently only rebound, but the rebound high point, the Fed announced the rate hike will really come when the dollar index is likely in 103 about the location, and build a double top.

  Therefore, if the December Fed rate hike, the dollar index likely to turn down. Now, the euro announced interest rate cuts, the effect and the Fed announced the rate hike is about the same, capital predators have seized this opportunity, when everyone thought the dollar should continue to rally, effortlessly find a big rival short wave plate, which It is a hearty, lucrative funds massacre last night incident, at least at the scale of its earnings more than one trillion US dollars.

After the weak dollar, the RMB yuan will be okay?

       Just past the renminbi incorporate SDR, it is actually happening behind an emperor to abdicate drama. US dollar share in the SDR is almost intact, 10.9 percent of China, mainly the euro, pound and yen let out. How to look like the dollar a few little brother, try to turn the yuan pull into same, of course, one of the most active is the euro and the pound.

        RMB added SDR, slow decline accelerated dollar hegemony, the United States is no way this point, in the period of review which has been talked about, because, if the United States allowed China to get involved, then China can only start all over again, IMF may end a mere figurehead. US may eventually have to play mahjong, instead of playing their own good at the bridge. More importantly, China included is the people, the general trend, the United States did not dare to go against the trend, otherwise people are lost.

       RMB join the international influence of SDR, it is more than expected, at least beyond American expectations. Because, after nearly 10 countries represented, to incorporate the renminbi foreign exchange reserves, increased investment in RMB assets. This psychological expectations very terrible, because it will greatly affect the current US strong dollar strategy.

    Strong dollar strategy, whose aim is to create the illusion of the American economy thriving in the world, the temptation for more capital to the United States then set high assets, thereby to complete the field in a large universe diversion of global capital, while the US capital at the universe after the big diversion, go to the whole world to acquire cheap assets. This strategy has become the United States from the subprime crisis turned completely, the only possible solution.


        But the hope that, with inclusion of the RMB SDR increasingly slim. So also, we see the US media out disinfection, said the yuan included in SDR, it will not have any immediate impact, but does not affect the status of the dollar in the world. Former Federal Reserve Chairman Ben Bernanke, also personally photographed, said the yuan included in the SDR, simply do nothing, which is equivalent to the Chinese made a small red flower it, we should not be all wrong.

  Butterfly wings have been instigated, and then it was too late to remedy. The dollar plunged last night, not just against the dollar this should not have time to correct abnormal strong, but also the host of the RMB capital market once Zhuanghang.

Strong dollar strategy or failure in advance

 In the review of 25 November, when I have talked about, Chinese Manniu opening, the biggest problem is the Fed's strategy of a strong dollar, because it greatly hampered the US-led strategic capital outflow China. "The Fed wanted to wait for the Chinese economy signals a further deterioration, especially after the stock market crash, China was a substantial outflow of capital, the rapid devaluation of the renminbi is expected to enlarge, once concerns about China's economic influence throughout the world, the US media in the calculation outside China Chu also top a few months, but fortunately, China stabilized now, China Manniu reopened, which gave the best weapon against the strong dollar China strategy. "

  Of course, my view is not mainstream, most Chinese scholars, are still forecast in the next few years the dollar bull market, and that the yuan to a large devaluation of house prices to drop. Some Americans even more than they are optimistic about the US economy.

In fact, when the global so generally optimistic about the time an asset, which in itself is a huge risk. Especially promising is the Fed deliberately misled come a time when the common good, hides a huge massacre future assets. China's rich past few years has been for the US real estate market, sent at least $ 350 billion in cash support, has almost the same, it may be necessary to go bargain-hunting quilt.

  Dollar plunged last night, did not see the Chinese media have too much coverage. Occasionally there are a few, but also "the dollar's slide," with the word. 2.2 percent, the biggest decline in six years, with the decline seen to have lost the basic objective.

 However, no one can stop the tide of history, the Fed and the White House, the fantasy of this to finance big showdown to complete the subprime crisis completely turned around, complete re-parasitic ambition dollar hegemony, and probably will soon become Bubbles.

   The above article not my orininal, Cnmoulding is a China mold maker , hope brought to share, as a plastic injection molding manufacturer in Shanghai, I still firmly believe that a big currency issue, at least if I choose to I want to hold dollars instead of the continuous depreciation of the yuan.