The Shanghai Securities News and China Securities Journal said on Monday that the current trend of the RMB is not sustainable and market participants should not expect it to continue. Meanwhile, People’s Daily pointed out that two-way fluctuations of the RMB are the norm. The RMB has risen by more than 4% since the beginning of 2025, and the offshore RMB exchange rate against the US dollar broke through 7 last week, hitting a new high in more than a year.
The Shanghai Securities News pointed out in an article that “one should never bet on a one-way appreciation of the RMB.” The article also mentioned that “several experts said that enterprises and financial institutions should adhere to the principle of risk neutrality and strengthen their management of exchange rate risks.”
The latest round of warnings has further strengthened the authorities’ efforts to curb the appreciation of the RMB. The central bank promised on Friday to step up efforts to prevent “excessive volatility risks” and has set the RMB’s central parity rate at a level lower than market expectations for the past two weeks. Additionally, when the onshore RMB exchange rate against the US dollar approached 7, state-owned banks also bought US dollars in large quantities.
According to the Shanghai Securities News, Guolian Minsheng Securities analyst Shao Xiang said that although the RMB is under upward pressure, China will not allow the RMB to appreciate significantly, and officials have sufficient policy tools to prevent this from happening.
China Securities Journal pointed out that due to external uncertainties and interest rate differences, “two-way fluctuations in the RMB exchange rate will remain the norm”. People’s Daily, regarded as the representative of the Communist Party of China, stated that “two-way fluctuations and greater flexibility in the RMB exchange rate are the norm”.
The People’s Bank of China’s “2025 Financial Stability Report” released last week pointed out that the People’s Bank of China will maintain the flexibility of monetary policy while guiding market expectations and preventing “excessive volatility risks”.
Kylie Lee, a global market strategist at DBS Bank in Hong Kong, said that the articles in official media “indicate that the authorities are not happy to see the renminbi appreciate rapidly in one direction.” She believes that a slow appreciation of the renminbi accompanied by two-way fluctuations may be acceptable.
Technical analysis:
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Gold: Yesterday, our plugin provided a buy stop alert in the blue area. The consolidation eventually achieved a profit-to-loss ratio of nearly 2:1. This morning, after a pullback, the price has stabilized again. Today, we should continue to look for rebound signals. Meanwhile, as the New Year’s Day holiday approaches, if there is a significant drop, it is recommended to wait and observe. For specific positions, please consult the plugin.
(Gold 15-minute chart)
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The Nasdaq index: The overnight price showed an expanding pattern near the blue zone, and our buy stop operation performed poorly. After the expansion consolidation, the price chose to adjust downward. We only recommend short-term long positions to participate in the correction rebound or simply observe for the day. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: The green buy limit area alerted by the plugin yesterday was not reached. It is recommended to maintain the position for another day today. At the same time, pay attention to the situation of liquidity sweeping in this area. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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