The RMB has a rare two-day limit or the weakest currency among the BRICS countries

At a time when the European debt crisis is intensifying, the US dollar is the first choice for safe-haven currencies, and it is strengthening against the market. Looking at the K-line chart since the RMB exchange rate reform, except for the small decline in the central parity of the RMB against the US dollar during the financial crisis in September 2009, it has been a “slope line” of continuous unilateral appreciation for six years. However, last month, the decline in the central parity of the renminbi against the US dollar reappeared. What's more, in the last two trading days of last week, the RMB against the US dollar showed a continuous limit in the spot trading market. The RMB has a rare two-day “down limit” driven by the demand for foreign exchange purchases. On December 2, the RMB spot market in the afternoon trading session on Friday, the spot price of RMB against the US dollar appeared at 6.3627 yuan, compared with the previous transaction. The closing price of the day 6.3635 yuan rose, but calculated according to the fluctuation range of five thousandths of the middle price of the day, 6.3627 yuan is the daily limit price of the yuan. The median price of the yuan against the US dollar last Friday was 6.3310. On December 1 of the previous day, the RMB had a short-term downside against the US dollar. Looking at the offshore market, NDF's one-year RMB against the US dollar reached 6.3790/40. At the same time, the latest turnover of the one-year swap against the US dollar against the US dollar was 21 points. Although the RMB spot market transaction has been in a downtrend for two consecutive days, counting the trend of the RMB against the US dollar in the middle of last week is another picture – still continuing to rise. Last week, the central parity of the RMB against the US dollar rose by as much as 244 basis points. The median price rises and the RMB has a daily limit. Is this subtle relationship a temporary situation in which the market is in urgent need of the US dollar, or is the RMB itself depreciating but the middle price is in danger? The market gives the answer? On November 19, Premier Wen Jiabao of the State Council said during his attendance at the East Asia Leaders' Meeting in Bali, Indonesia, that he had noticed the expectation of the depreciation of the RMB exchange rate in the overseas non-deliverable forward foreign exchange market from late September to early November. It is not artificially determined, it is the market's reflection on the RMB exchange rate. Wen Jiabao said that increasing the flexibility of the RMB exchange rate means that the renminbi can both appreciate and depreciate. On the market last Thursday and Friday, the dollar was obviously insufficiently supplied, pushing the market for the yuan to fall to the dollar. In the eyes of some market participants, it is not surprising. A foreign bank trader of a large bank told reporters: "In fact, the signal of RMB depreciation has appeared in around July. The situation of buying the US dollar in the market is very strong. The transaction price of the RMB has deviated significantly from the middle price in two days. It can be seen that The strength of the middle price to suppress the devaluation is very obvious.” Liu Dongliang, a senior financial analyst at China Merchants Bank, said in an interview yesterday that the purchase of foreign exchange is so large, the reasons are more complicated, and there may be three reasons: bearish renminbi, domestic and foreign purchase arbitrage And safe haven demand. Whether the renminbi is short-selling as predicted by some people will be greatly depreciated. Liu Dongliang believes that the central bank should have the ability to control the stability of the renminbi , and the central bank’s control intention is also very obvious. A recent forecast by economists and analysts published by Bloomberg shows that “as China’s export surplus continues to decline, the exchange rate of the yuan against the US dollar will weaken in the next four months.” Economists It is predicted that the renminbi may become the weakest currency in the BRICS in the next four months. Data show that China’s trade surplus in October has fallen to $17 billion, compared to $27.2 billion in the same period last year. The Chinese Minister of Commerce recently said that due to the European debt crisis, the possibility of a decline in China's trade exports in the coming months is very high. A large number of market analysts pointed out that if China's trade surplus continues to decline, the external appreciation pressure of the renminbi will come to an end.  

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