RMB Exchange Rate Temporarily Difficult To Choose Side Stations Need To Be Vigilant Against Depreciation Expectations Warming

China's economic data, which was published recently, worried the market. The trade deficit and industrial added value in February were less than expected, and the market began to believe that there was an inherent reason for the collapse of the RMB in the month, which was reflected in the recent devaluation of the forward exchange rate.

When China's downward pressure on the economy has been resolved, it has become the most concerned issue in the market.

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On the one hand, the central bank executives repeatedly stressed that the exchange rate will tend to be two-way fluctuations. On the one hand, the premier of the State Council, while admits the pressure of economic downturns, also conveys confidence that the exchange rate market will not be able to judge the direction of P.

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< p > "now we are looking at more difficulties and problems.

This year's challenge is still grim and may be more complicated.

Premier Li Keqiang answered questions from Reuters.

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"P," he continued, "we have the experience of coping with the economic downturn last year. China's economy has great potential and resilience. We have the ability and conditions to keep the economic operation in a reasonable range this year."

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< p > China's 1-2 month industry, < a href= "//www.sjfzxm.com/news/index_c.asp" > investment > /a > consumption data are far from market expectations and have been low for several years, indicating that the first quarter economic growth or overall slowdown is not optimistic.

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< p > market participants analyzed that the RMB exchange rate forecast in the spot market has been relatively differentiated and the foreign exchange purchase balance is relatively balanced after the February RMB collapse and the uncertainty of the current economic and policy.

But in the forward market, signs of a rising expectation of depreciation are observed. If the trend persists, it will lead to a depreciating spot.

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After P entered into March, the exchange rate difference between the offshore and offshore markets almost disappeared, and the two sides fluctuated narrowly around the middle price, while the shore dollar point of departure increased, and the demand for long-term purchase of foreign exchange increased.

A year away, it was still at a discount at the beginning of the month, but on Friday it touched 385 ideas.

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< p > a number of traders said, "a href=" //www.sjfzxm.com/news/index_c.asp "> forward market < /a > recently, there are larger customers, and at the same time, influenced by the No. 20 article issued in May last year, some banks choose to purchase foreign exchange in the forward market to meet loan to deposit ratio.

However, there are some foreign exchange settlement on Friday, and the latter trend is still to be observed.

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< p > traders say there are many factors in the flow of funds and market expectations. In the short and medium term, there is a lack of direction in the spot market.

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< p > > a href= "//www.sjfzxm.com/news/index_c.asp" > capital flow < /a >, in the two quarter, current account is expected to recover surplus and reduce short-term disturbance to exchange rate.

Zhou Xiaochuan, governor of the central bank, clearly recognized the phenomenon observed by some people at the NPC and CPPCC news conferences, that is, China's trade surplus in the first four or five years has been reduced, and even in some months the trade deficit will appear.

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< p > "I think Zhou Chang has made it clear enough that this wave has depreciated to the end of the first quarter."

One foreign trader said.

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< p > but there is still uncertainty about market expectations.

Domestic economic data show downward pressure is increasing. The withdrawal of the QE from the US Federal Reserve is still likely to lead to capital reflux and the devaluation pressure on the RMB.

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< p > another foreign trader said that in the first half of the year there was a coexistence of more profits and negative factors. The expected exchange rate continued to oscillate between the high and low points (6.04-6.18) that had been set up.

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