Recently, the exchange rate of RMB against the US dollar broke through 6.4 yuan, a new high in more than four months. Institutional people believe that among the multiple factors contributing to the short-term appreciation of the RMB exchange rate, the fundamental factors represented by the strong foreign trade surplus have become the foundation and key force, and will continue to provide support for the RMB exchange rate. Considering the impact of subsequent tightening of US dollar liquidity, it is difficult to change the range fluctuation trend of RMB exchange rate. Meanwhile, the RMB exchange rate remained stable, further enhancing the attractiveness of RMB assets. The dollar correction is just a catalyst Since the end of September, the RMB exchange rate against the US dollar, which has been sideways for a long time, has suddenly risen. On October 19, the onshore and offshore RMB rose above 6.40 yuan for the first time since June this year. The central parity rate of RMB against the US dollar broke through this important threshold on October 21. On October 26, the central parity rate of RMB against the US dollar was 6.3890 yuan, an appreciation of 964 basis points over the end of September. In terms of market exchange rate, as of 16:30 on the same day, the onshore spot exchange rate of RMB was reported as 6.3812 yuan, an appreciation of 868 basis points since September 30; The spot exchange rate of offshore RMB was reported at 6.3786 yuan, an appreciation of 986 basis points since September 30. Appreciation suddenly attracted people's attention, but in the view of many analysts, this trend has long shown signs. The weak dollar makes the strong, and the strong dollar makes the stable, which is an important feature of the RMB exchange rate operation since this year. Since June, the US dollar index has returned to above 90, with an obvious upward trend, and non US currencies have depreciated against the US dollar. Over the same period, the RMB exchange rate reacted calmly. Even in the continuous rise stage of the US dollar index in September, the RMB exchange rate against the US dollar was still between 6.45 yuan and 6.5 yuan, moving out of the independent market. Since the end of September, the US dollar index has gradually weakened upward, resulting in high-level adjustment, and the RMB exchange rate has set off a round of appreciation. According to the analysis of market participants, in this round of RMB exchange rate appreciation, the correction of US dollar index has played a catalytic role, but obviously there are other factors. Strong foreign trade plays a key role Many factors contributed to the rise of the RMB exchange rate above 6.4 yuan, which has become a market consensus. In addition to the fluctuation of the US dollar exchange rate, some institutions suggested that the recent increase in capital inflows and signs of improvement in the trade environment. In addition, one factor has been repeatedly mentioned - foreign trade surplus. The General Administration of Customs recently announced that in the first three quarters of this year, China's exports increased by 22.7% year-on-year, with a cumulative trade surplus of 2769.1 billion yuan. Mingming, chief analyst of fixed income at CITIC Securities, believes that the strong export performance is the main reason for the recent rise of the RMB exchange rate above 6.4 yuan. "In the long run, China's current account has been in surplus for a long time, and the situation of international capital flows has been improving. COVID-19's" stress test "highlights China's economic stability and strong export competitiveness, supporting the long-term core of the RMB exchange rate," said Zhong Zheng, chief economist of Ping An Securities. "The appreciation of the current RMB exchange rate is related to the short-term fall of the US dollar index. It also reflects the market's expectation of the improvement of the trade environment from the medium-term perspective, and also reflects China's good balance of payments and international capital flows. Exchange rate flexibility enhances the attractiveness of RMB assets For the follow-up trend of RMB exchange rate, there are little institutional differences. Most believe that the short-term impulse appreciation will not change the operation trend of two-way fluctuation of RMB exchange rate. The research report recently released by CICC believes that the trend of the US dollar, the export situation and the trend of China's monetary policy will be important factors affecting the operation of the RMB exchange rate in the future. "In the medium and long term, under the background that the US dollar may strengthen again, China's trade balance is balanced and monetary policy is easy to loosen but difficult to tighten, the continuous appreciation of the RMB exchange rate is a small probability event," the Research Report wrote. Zhong Zhengsheng believes that in the short term, the US dollar index still has a strong driving force, the prospect of improving the trade environment remains uncertain, and the driving force for further appreciation of the RMB exchange rate is weak; In the medium term, China's economy is facing certain pressure of steady growth. The convergence of China US economic growth gap in 2022 may cause some downward pressure on the RMB exchange rate; In the long run, China's economic stability and strong export competitiveness support the operation center of RMB exchange rate. Overall, the RMB exchange rate will maintain a two-way fluctuation and increased flexibility. "Since the beginning of this year, the RMB exchange rate has fluctuated both upward and downward, and has remained stable on the whole." Wang Chunying, deputy director of the State Administration of foreign exchange, recently stressed that in the future, the RMB exchange rate will still depend on factors such as domestic and foreign economic situation, balance of payments and changes in the international foreign exchange market. The exchange rate will neither continue to appreciate nor depreciate, It will continue to maintain basic stability at a reasonable and balanced level. It is worth mentioning that, thanks to the support of economic fundamentals, the RMB exchange rate has shown outstanding toughness in recent years, which has also become another "plus item" to enhance the external attraction of RMB assets. In the stock and bond market, the participation of international investors has been deepened, and the net inflow of funds has been maintained. (outlook new era)