Based on the re-examination of the historical trend of the US dollar index and the analysis of the current domestic high-frequency data affecting the RMB exchange rate, CITIC Securities believes that the spot exchange rate of the US dollar against the RMB may have been confirmed, but it may be difficult to appreciate the RMB in a short period of time, and the overall situation remains wide. For domestic monetary policy, the easing of RMB exchange rate pressure does not mean that the window period of interest rate cut will be ushered in again.
The following are its latest views:
_ Has the US dollar index reached an inflection point?
The growth rate of overall inflation and core inflation in the United States in June 5438+ 10 was lower than market expectations, indicating that marginal inflationary pressure eased, which led to the decline of market inflation expectations and interest rate hike expectations, and led to the recent weakening of the US dollar index. In the history of resumption, the upward momentum of the US dollar index often comes from the tightening policy of the Federal Reserve and the fact that the US economy is stronger than other non-US economies. The main factor driving the downward trend of the US dollar index is the strong performance of the non-US economy, especially in Europe.
Standing at the current point in time, we believe that the current stage high point of the US dollar index may have passed, but the conditions for its downside are not yet available. Looking back, although the signal to raise the Fed's interest rate hike expectation may be getting weaker and weaker, from the perspective of relative economic difference, inflation in Europe remains high, economic recovery is weak, and it is difficult for the economic difference between Europe and the United States to converge obviously in the future, or the US dollar index cannot go down, which does not rule out the potential risk that the unexpected recession in Europe will lead to the rebound of the US dollar index.
_ Has the inflection point of RMB exchange rate been determined?
At present, the stage high point of the US dollar index may have passed, and its passive depreciation pressure on the RMB is weakening. Even if the US dollar index rebounds more than expected, it may be difficult for the spot exchange rate of the US dollar against the RMB to break through the previous high point under the influence of factors such as the improvement of the domestic economy, the slowdown of capital outflow pressure in the stock and bond market, the backlog of foreign exchange settlement demand or the release at the end of the year.
We believe that the current high spot exchange rate of the US dollar against the RMB may have been confirmed, but the trend appreciation of the RMB may be difficult, and it is more likely to maintain a wide fluctuation in the short term. In the long run, the RMB exchange rate may gradually return to internal factors, which needs the stress test of the epidemic and the data verification of economic recovery to support it.
For domestic monetary policy, the pressure from RMB exchange rate is not the only consideration for the central bank to cut interest rates. The domestic aggregate monetary policy is restricted by the interest rate increase cycle of the Federal Reserve and the upward trend of domestic prices. The easing of RMB pressure in the short term does not mean that the window period of interest rate cut will be ushered in again.
_ Risk factors:
Unexpected events pushed up the rebound of the US dollar index; The epidemic situation in some parts of China has repeatedly exceeded expectations, disrupting fundamental repair and market expectations.