Chinese analysts expect the renminbi-USD exchange rate to remain within the 6.30 – 6.35 range following a recent string of rises.
Data from the China Foreign Exchange Trade System (外汇交易中心) indicates that on 15 March the Chinese yuan posted an increase for the fourth consecutive trading day, rising by 64 basis points to hit 6.3141 against the dollar, and hitting its highest level since 12 February 2018.
Wang Qing (王青), general manager of the R&D Department for Dongfang Jincheng said to Securities Daily that there were two main factors behind successive increases in the RMB reference rate, the first being the impact of shakes up in the Trump administration serving to soften the dollar, and the second being the recently release of Chinese economic data pointing to a strong performance for the start of the year.
Looking ahead, Wang Qing said that while the US Federal Reserve will launch its first rate hike for the year this week, this information has already been fully factored in by the market.
Wang instead expects Trump’s “trade war” and other factors to play a sizeable role in curbing the greenback and the US dollar index.
Following the end of China’s Two Sessions, expectations of strong financial regulation will rise, and continue to provide support to the renminbi.
For this reason Wang expects the RMB exchange rate to remain stable at between 6.30 and 6.35 until the outcome of the US Fed meeting is announced on 22 March.