The RMB Exchange Rate Trend

The RMB exchange rate against the U.S. dollar continues to rise

On November 20, the onshore and offshore RMB increased against the US dollar, both rising above 7.17, rising by more than 800 basis points and 500 basis points respectively during the day, both reaching new highs in three months. Since November, the onshore RMB has rebounded by more than 1,400 points against the U.S. dollar, and the offshore RMB against the U.S. dollar has rebounded by more than 1,700 points.

On November 21, the RMB exchange rate continued to maintain an upward trend. As of 9:45 a.m. on November 21, the onshore and offshore RMB exchange rates against the U.S. dollar were reported at 7.1391 and 7.1432 respectively.

（pic cr: Internet）

Influenced industries

“From a cost perspective, the appreciation of the RMB means a decrease in import prices, especially in industries that rely on bulk commodity imports, such as papermaking, basic chemicals, transportation and other industries. An increase in the relative value of the RMB can reduce the cost of commodities priced in U.S. dollars, thereby increasing profits." Huatai Securities said.

Therefore, relatively speaking, industries with a higher proportion of domestic income will benefit more from the appreciation of the RMB. Those industries with a high proportion of overseas revenue are affected by relatively weak external demand and declining export price competitiveness, putting pressure on the revenue and profit sides.

RMB exchange rate trend in the future

Last week, the renminbi rose nearly 500 points in a single week. Three major factors, including positive signals in Sino-US relations, falling U.S. bond yields, and exporters' seasonal demand for foreign exchange settlement, pushed the renminbi to stabilize. Although the subsequent trend of the renminbi still depends on changes in Sino-US interest rate differentials and China's economic recovery, short-term sentiment-driven short squeezes may lead to over-rising of the renminbi.

Ping An Securities believes that the stage of greatest pressure for depreciation of the RMB exchange rate has passed, and factors conducive to the RMB exchange rate are gradually accumulating. There is still room for a slight appreciation of the RMB exchange rate during the year, and it may fluctuate between 7.15-7.35 in the short term.

Knowing recent RMB exchange rate is vital to all import and export products, so as our glue business. Seize the benefits of the RMB exchange rate, and offer you more competitive export prices.

(pic cr: Internet)