Limited space for short-term appreciation of RMB

-Our correspondent Wang Hui Shanghai reported August 4, the interbank market in the U.S. dollar against the renminbi exchange rate of 1 U.S. dollars against the renminbi 6.7715 Yuan, set a new low since the exchange. Analysts say the weak dollar is the main reason for the dollar to hit a new low in the renminbi, and that the yuan's active appreciation is not obvious. On the other hand, due to the recent rise in the euro and other major non-US currencies against the U.S. dollar, favorable for exports outside the United States, the renminbi will be expected to reduce the pressure of passive appreciation of the dollar.　　Meanwhile, there is still a need to be wary of the hot money effects of a weaker dollar in the future. The median price is approaching 6.77. China Foreign Exchange Trading Center announced in Wednesday, August 4, 2010 Interbank Market exchange rate of the dollar and other trading currencies on the renminbi exchange rates of 1 U.S. dollars against the renminbi 6.7715 yuan, 1 euros against the renminbi 8.9519 yuan, 100 yen to the renminbi 7.9069 yuan, HK $1 to RMB 0.87248, 1 pounds to RMB 10.7944 yuan. Compared with the previous trading day, the U.S. dollar against the median price of the renminbi lower 8 basis points, again to create a new low since the exchange change.　　The U.S. dollar to the renminbi exchange rate between July 12 and July 18 respectively to create a 6.7718 low. It is worth noting that, despite the U.S. dollar against the Chinese yuan to stand on the historical lows, 4th, the euro, yen, Hong Kong dollar, Sterling on the renminbi, the median level was slightly lower than 3rd. Analysts said the renminbi's aggressive appreciation was not characteristic, and the continued discharge of the dollar index was in fact the main reason for the dollar's low intermediate price for the renminbi.　　International foreign exchange market, August 3 The United States dollar index fell for the 4th consecutive trading day, as of August 4 19 o'clock, the euro, the Japanese yen and other major non-US currencies in the second half of the dollar has been 3% to 8% of the rise in the U.S. In fact, from the 4th Interbank foreign exchange market spot trading situation, the U.S. dollar against the renminbi, the new low price, did not ignite the market long yuan enthusiasm. Wednesday U.S. dollar to the renminbi at sight for a narrow range of fluctuations, the full day amplitude of only 0.02%, and did not break 6.7676 of the early lows.　　In the offshore market, the dollar against the RMB 1-year NDF4 Day also did not appear from the middle price to create a lower trend, the whole day is still around the recent 6.67 yuan within the range of narrow fluctuations.　　The lack of a significant appreciation of the dollar for the U.S. dollar against the yuan's new low on the 4th, and the recent decline in the dollar, analysts said, whether from the monetary authority's stance or from the market transaction level analysis, in the short term, the renminbi may not have much room for appreciation. Societe Generale economist Lu Commissar said that the current renminbi against the U.S. dollar exchange rate is close to a balanced level, the lack of continued significant appreciation of space, the future to consider in the basket of currency to significantly increase the weight of the euro, while expanding the yuan to the dollar fluctuations, realIs now more resilient to the dollar.　　If the monetary authorities increase the daily fluctuation of the USD to RMB from the current 0.5% to 1%, it will be conducive to the cultivation of the exchange rate hedging market. At the same time, the recent hot money flow problem has aroused widespread concern. Based on past experience of the global financial market, the continued weakening of the dollar index often leads to the influx of international hot money into emerging markets. At a recent symposium held by the State administration of foreign exchange, the bureau said in the second half of the foreign Exchange Bureau will do a good job to deal with and combat "hot money" into specific actions related cases of verification and punishment, continue to maintain the "hot money" of the high-pressure attack situation, under the premise of controllable risk, focused, selective promotion of capital project Reform. Observers said that while the market's expectations of a further sharp appreciation of the renminbi against the dollar had been weak, the potential hot-money release from the weaker dollar remained a cautionary note.