RMB Exchange Rate Rebounded Strongly

On August 5, the strong rebound of the RMB exchange rate attracted widespread attention. The onshore RMB exchange rate against the US dollar closed at 7.1385, up 765 basis points from the previous trading day. This change is not only the result of short-term market fluctuations, but also the result of multiple factors. From a macroeconomic perspective, the change in exchange rate is a direct reflection of the market’s economic expectations. The appreciation of the RMB shows the market’s optimism about China’s economic prospects.

As the world’s main reserve currency, the trend of the US dollar has a profound impact on the exchange rates of other currencies. Recently, the weak US non-farm payrolls data and the rising unemployment rate have led to rising market expectations for the Fed to cut interest rates, which has directly led to a decline in the US dollar index.

The latest exchange rate of one US dollar to RMB today, August 6, 2024 (Tuesday):

1 US dollar = 7.1318 RMB (1 RMB = 0.14022 US dollars)

The trend of the RMB exchange rate will be affected by multiple factors. The pace of global economic recovery will directly affect the strength of the US dollar, and thus the RMB exchange rate. If the US economy continues to weaken, market expectations for the Fed to cut interest rates will further increase, which will be conducive to the appreciation of the RMB.