The onshore yuan also hit 7.17 against the dollar, up more than 400 points on the day.

On November 20, the central parity rate of the RMB against the US dollar was 7.1612, the highest since August 11, 2023, an increase of 116 basis points, the largest increase since September 12, 2023.

On November 20, the November 1-year loan market quote rate (LPR) was 3.45%, compared with 3.45% last month; The long-term LPR was at 4.2%, compared with 4.2% last month.

Recently, under the background of the US dollar index and US Treasury yields continued to fall, the RMB started a sustained rebound market, since November, the RMB has rebounded nearly 1400 points against the US dollar, and today it is pulling more than 460 points.

According to the Securities Times reported on November 20, Guotai Junan (15.260, -0.01, -0.07%) (Hong Kong) believes that there are external factors behind the rapid appreciation of the renminbi - the weakening of the US dollar brought about by the expected end of the Federal Reserve interest rate hike cycle, but there are also some places that make the market confused, especially from mid-October. The cost of funding offshore renminbi has begun to fall significantly.

The cost of funding the offshore yuan has started to fall significantly, meaning the cost of shorting the currency has also fallen, but instead of the depreciation that some investors had feared, the offshore yuan has taken advantage of the recent weakness of the dollar to see a strong appreciation. Guotai Junan (Hong Kong) believes that the central parity has played the role of a "stabilizer", because the central parity of the RMB against the US dollar has been relatively stable, bears are still more afraid of the policy intention, not easily bet in this area, but want to wait for more clear signals. Meanwhile, traders familiar with the seasonality of the renminbi will know that the currency tends to strengthen in the final two months of the year - which may be related to the foreign exchange settlement habits of many companies.

Looking ahead, the first key position to observe the offshore yuan is around 7.17, which is where the current midpoint is. Once the spot exchange rate reaches this position, whether the central parity will be adjusted will be worthy of market attention. If the offshore yuan strengthens and breaks 7.15, then some investors may need to adjust their medium-term views on the yuan. But in any case, the counterattack of the renminbi will be accompanied by the weakening of the dollar, and there will be a gradual strengthening of the rhythm.

In addition, according to the Beijing News Shell finance report, Nanhua Stock (12.400, -0.04, -0.32%) macro foreign exchange analyst Zhou Ji told reporters that the good superposition of Sino-US relations has put pressure on the external pressure of the RMB exchange rate in the short term, which means that the next need to pay attention to whether the market's expectations of the RMB fundamentals can be effectively improved. Recently, the domestic macroeconomic and financial data released better than expected, combined with the central bank and other three departments, the RMB exchange rate continues to move in the direction of appreciation.

Ping An Securities strategy team pointed out that from a seasonal point of view, the end of the year is usually the peak of foreign exchange settlement, which helps to hedge the depreciation pressure of the exchange rate. Especially since the beginning of this year, the willingness of enterprises to settle foreign exchange is low, and the scale of bank settlement and sale of foreign exchange on behalf of customers is significantly lower than in previous years. Once companies focus on foreign exchange settlement at the end of the year due to financial needs, this helps boost the yuan's exchange rate.

According to Economic Information Daily reported on the 20th, the IMF recently raised China's GDP growth forecast for 2023 to 5.4% from the previous 5%, while increasing the GDP growth forecast for 2024. A number of foreign financial institutions also cast a vote of confidence in the Chinese economy. Deutsche Bank maintains a positive outlook for China's economy, predicting that GDP growth will exceed 5% in the fourth quarter and 5.2% for the full year.

Goldman Sachs also further raised China's 2024 GDP growth forecast, Goldman Sachs chief China economist Shan Hui said in an interview with the media, this expectation is mainly based on the following factors, including stable consumption prospects, central fiscal support, including real estate, infrastructure, manufacturing investment, as well as the global economy external demand and exports will have a positive impact.

In addition, many foreign institutions are also optimistic about the potential that will be released by the continuous transformation and upgrading of China's economic structure. According to UBS's China Economic Outlook 2024-2025 report, investments related to green transformation will likely remain strong.

Wellington Investment Management Senior Managing Director, Asia Chief Investment Officer Pujiangning said in a recent public address that China has been actively shifting the drivers of its economic growth model (2.870, 0.11, 3.99%) from quantity to quality over the past few decades. For example, from credit, real estate and infrastructure to services, high-end manufacturing and technological innovation. "In some important global industries, China has strategically planted the seeds for long-term future economic growth." 'he said.

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