*** Seen new high against the U.S. dollar

The China Securities Exchange reported that the central parity of RMB against the US dollar once again set a new high since the exchange rate reform in 2005 on the 13th.

According to data from the China Foreign Exchange Trading Center, the central parity of the RMB against the US dollar was reported at 6.6693 on the 13th, which was 82 basis points higher than the previous day. It is worth noting that on the 12th, the US dollar resumed its downward trend after a farewell to a short-term rally, and the US dollar index fell 0.18% on that day. Under the weak dollar background, the passive appreciation of the renminbi is evident. In the spot market, the yuan closed at 6.6654 against the US dollar on the 12th, up 80 basis points from the previous trading day.

In order to resolve the problems of economic growth and high unemployment, the second quantitative easing policy of the United States is in full swing. Taking into account the fourth consecutive monthly decline in the US non-agricultural employment data released recently, the market expects that the Fed may officially launch the second round of quantitative easing monetary policy at the latest round of interest rate meeting in November. Prior to this, the US dollar may react to market expectations in advance, which will continue to put pressure on the renminbi exchange rate.

Some traders said that the recent spot exchange rate of the yuan against the US dollar showed more than the trend of the middle price, indicating that the market's expectation of appreciation of the renminbi has increased. However, the data disclosed on the 13th showed that China’s trade surplus in September was US$120.6 billion, which fell to a low of nearly 5 months. The shrinking of the trade surplus will help cushion the pressure on the appreciation of the renminbi. In the future, the exchange rate of the renminbi against the US dollar will be more likely to show a mild appreciation.