The US dollar has cut interest rates, how much will the Chinese yuan appreciate? Will it quickly appreciate and break through 7? If it appreciates and breaks through 7, what will happen?
In the past two days, the interest rate cut of the US dollar has occupied the headlines, and the appreciation of the Chinese yuan and the surge in Chinese assets have also been on the hot search list. So, what kind of trend will we see next?
Let's take a look at what kind of achievements the Chinese yuan and Chinese assets have made in the past two days due to the interest rate cut of the US dollar? Is this worth boasting about?
Yesterday, influenced by the interest rate cut of the US dollar, the Chinese yuan exchange rate rose sharply, with the offshore yuan exchange rate once surging by more than 300 basis points, approaching the 7.06 mark, setting a new high since May 2023 for 16 months.
This morning, the onshore and offshore yuan exchange rates continued to rise, both breaking through 7.06, with the lowest point in the market reaching 7.0538.
At the same time, A-shares also opened high with increased volume, with more than 4,600 stocks in the two markets rising, and the transaction volume quickly expanded to 62.94 billion yuan, setting a new high in nearly half a month.
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At the same time, the US dollar index also once broke through 100, and then slowly rose back to above 100, closing at 100.67 yesterday, it seems that breaking through 100 is just a matter of time.
The surge of the Chinese yuan from around 7.27 at the end of July to the current 7.06 has not been seen for a long time, which shows that the dollar tide is indeed the sickle of the global foreign exchange market, and it is still very sharp.
The US dollar will continue to cut interest rates, it seems that the appreciation of the Chinese yuan breaking through 7 is in sight?So, if the Chinese yuan rapidly appreciates and breaks through the 7 threshold, what would happen? Three things are destined to occur.
Firstly, international capital would accelerate its flow into our country, propelling the Chinese stock market to rise, with real estate expected to stabilize, and China's capital market would return to prosperity.
Secondly, the purchasing power of the yuan would increase, enhancing our confidence, boosting consumption, and promoting the growth of China's economy.
Thirdly, in the short term, a rapid appreciation of the yuan would not be conducive to exports.
Many people worry about exports due to yuan appreciation, but this is only a short-term phenomenon. After stabilizing for a period, if there are no significant fluctuations in the yuan exchange rate, exports would rebound.
There are three very important factors at play here.
Firstly, our export advantages no longer rely solely on price; the overall cost-performance ratio has been comprehensively enhanced.
Secondly, even if we only consider price, our advantages remain significant, and yuan appreciation is not enough to reverse the export advantage.
Thirdly, while exchange rates do have an impact on exports, the fundamental factor is still the demand for Chinese goods. As long as the real demand is strong, the impact of exchange rates will be very limited.The three matters mentioned above essentially discuss the overall trend. There may be short-term setbacks, and Americans might also engage in sabotage, but the overall trend will definitely follow this path. This is an objective law and cannot be prevented by human effort.
Since the situation is so favorable, can we declare the end of the Sino-American financial war? Will the situation between China and the United States reverse?
Let's delve a little into this question.
In the past two days, the US dollar has finally cut interest rates, which has excited many people who are spreading the news.