On June 2, the central parity rate of the RMB against the U.S. dollar was reported at 6.7095, a depreciation of 444 basis points, and a cumulative increase of 292 basis points this week. The central parity of the previous trading day was at 6.6651, the closing price of the onshore RMB was at 6.6941 at 16:30, and at 6.6858 in the evening trading at 23:30.
The central bank launched a 7-day reverse repurchase operation of 10 billion yuan in the open market, and the winning interest rate was 2.10%. Wind data shows that the 10 billion yuan reverse repurchase expired today.
The dollar index rose sharply on the 1st. The U.S. dollar index, which measures the greenback against six major currencies, was up 0.73 percent on the day at 102.4980 in late trade.
From June 1, the Federal Reserve began its plan to reduce its balance sheet. During the Covid-19 pandemic, the Fed’s balance sheet has ballooned to nearly $9 trillion.
The Federal Reserve’s Beige Book report on economic conditions released on Wednesday said all 12 Fed jurisdictions reported sustained economic growth, with most showing slight or moderate growth; four regions showed moderate growth.
According to the CICC Research Report, currently affected by the peaking and correction of the US dollar index, the gradual fading of the epidemic in China, and the strengthening of confidence in economic stabilization, the USD/RMB has obvious signs of peaking in the short term, and the period of rapid depreciation may have ended. In the second half of the year, the long and short factors affecting the central change of the RMB exchange rate were relatively balanced. The peaking of the US dollar, the rebound of the economy and the adjustment of export tariffs to the United States may become important forces supporting the RMB exchange rate; while the pressure of external demand and the revision of valuation may become the forces weakening the RMB exchange rate; the impact of cross-border receipts and payments is relatively balanced . Overall, the RMB exchange rate may stabilize around 6.65 in the second half of this year.