In the past two days, the appreciation of the renminbi has once again broken through an important threshold and gone straight to break 7. This has attracted widespread attention and heated discussions in the market, and there are different opinions. There are many voices in the market that the pressure of RMB appreciation is difficult to contain, and the moment to break 7 is coming.
There are many factors at play behind the appreciation of the renminbi. First of all, dollar capital has been singing about the Chinese economy, but they will not lie in the face of interests. Their smashing behavior is just to better and large-scale arbitrage, which is their consistent method.
Secondly, the direct positive factors for the appreciation of the RMB are the pause in interest rate hikes by the US dollar and the release of ** signals from the Federal Reserve. The last two trading days have continued to appreciate, with a cumulative increase of 118%。This is also the first time that the yuan has risen above 7.0% since the beginning of June 202310 important passes. The fact that this response was the most immediate does not mean that these factors are the only ones at play.
In the long run, the appreciation of the renminbi is closely related to China's economy and Chinese assets. Behind the renminbi is the Chinese economy and Chinese assets, and only when the Chinese economy is recognized and Chinese assets have value can the renminbi remain stable and strong.
In addition, the market expects foreign capital to flow back to China, especially after the US dollar enters a cycle of interest rate cuts in 2024. The large-scale influx of US dollar capital into China has become an inevitable trend, as China is one of the most dynamic economies in the world, with the most dynamic innovative technologies and a large number of high-quality assets. Even in the real estate market, which is not valued by Chinese, it is a high-quality asset in the eyes of US dollar capital.
There is a hidden meaning behind the appreciation of the RMB, that is, the demand for the exchange of RMB has increased, **naturally**. This may also be the possibility that some institutions are gathering momentum in advance and hoarding RMB capital. Recently, US dollar capital institutions such as Goldman Sachs and Moody's have frequently shorted RMB assets, but this is actually a manifestation of their continued suppression of RMB assets, which shows that they are optimistic about the Chinese market and deliberately create a certain atmosphere.
Signs of foreign capital returning to China are already emerging. Northbound funds rose for two consecutive days with a relatively large trading volume. ** The adjustment is also a signal of the return of foreign capital. These signs show that foreign capital is making arrangements in advance to prepare for large-scale entry into the Chinese market in the future.
The entry of foreign capital into the Chinese market will trigger a series of changes. First of all, the large-scale inflow of foreign capital will lead to a storm of RMB assets. Not only **, but also inflation will return. Second, the entry of foreign capital will have a positive impact on China's economy and asset market, and promote the development of China's economy and the prosperity of the asset market.
Although there are fears that the United States** will restrict or control the large-scale entry of dollar capital into China, in fact they are encouraging capital around the world** to prepare for the realization of the dollar tide. Historically, the United States has repeatedly switched between austerity and water release to pursue its own interests. So, the situation will become more intense in the future, and we will also usher in a global competition.
The trend of RMB appreciation and the expected return of foreign capital have brought important opportunities to China's economy and asset markets. As an important player in the global economic system, China has the conditions and potential to attract foreign investment. The large-scale entry of foreign capital will inject new impetus into China's economy and promote the vitality of the asset market.
However, we should also be aware that the inflow of foreign capital will bring new challenges. As an emerging economy, China needs to further strengthen the opening and regulation of the financial market, regulate the behavior of foreign investment, and avoid capital market volatility and risks.
In addition, China should also actively use the entry of foreign capital to accelerate the reform and innovation of the domestic market and improve its core competitiveness. Only by continuously deepening reform and strengthening innovation capabilities can China's economy achieve sustainable development and maintain its competitive advantage in the global market.
In short, the appreciation of the renminbi and the repatriation of foreign capital are the trend of China's economic development, and we must fully recognize the opportunities and challenges, actively respond to them, and work hard to build an open economy and create conditions for medium-quality development. Only in this way can we promote the long-term stability and sustainable development of China's economy.