China Merchants Securities: There is a High Probability that the RMB Exchange Rate will Return to the Appreciation Channel in the Second Half of the Year

According to a research report released by China Merchants Securities, the RMB exchange rate is already at the end of depreciation, and there is a high probability that it will return to the appreciation channel in the second half of the year.
The three positive changes mean that the RMB exchange rate is at the end of its depreciation, and there is a high probability that it will return to the appreciation channel in the second half of the year.
First, China’s exports will strengthen again in August.
Second, at the end of the Fed‘s interest rate hike, the European Central Bank is bound to continue to raise interest rates. Under this contrast, the dollar may accelerate its downward trend again.
Third, this year is not a big year for risk aversion, and the upward momentum of the dollar brought about by hedging demand will weaken before the end of this year and the beginning of next year.
Increased volatility is likely to be the new normal of the RMB exchange rate under the background of internationalization.