In the offshore exchange market last night, the Chinese yuan against the US dollar experienced a stunning reversal, with the highest increase reaching 1200 points, completing the entire process from a sharp decline to a significant rise within a single trading day.
Currently, the daily K-line of the Chinese yuan has shown an extremely long upper shadow line, and in the next month, the Federal Reserve is not expected to raise interest rates, indicating that the trend of the Chinese yuan may experience a reversal.
01
During the day yesterday, especially after 9 AM Beijing time, the Chinese yuan exchange rate continued to decline.
It opened at 7.17, but by noon, it had already broken through 7.23. The afternoon was relatively stable for a while, but after 5 PM Beijing time, it continued to fall and broke through several levels again, reaching its lowest point at 7.2673. This is also the lowest position of the Chinese yuan in nearly 13 years.
However, what was unexpected was the sudden change in the situation. The Chinese yuan began to rise continuously, quickly recovering through several levels such as 7.26 and 7.25.
Advertisement
The Chinese yuan exchange rate even reached as high as 7.1453 yesterday, higher than its opening position.
In this way, the Chinese yuan completed a V-shaped reversal throughout the day, from a sharp decline to a significant rise, not only pulling back all the decline but also closing the day with an increase.
Correspondingly, the US dollar index experienced a significant drop yesterday, reaching as high as 114.79 at one point, but it had returned to 112.71 by the close.The fluctuation in the Chinese yuan exchange rate yesterday was truly breathtaking.
Although the yuan has been continuously depreciating over this period, there has never been a day like yesterday when it fell by more than 800 points.
Since September, it has fallen by more than 400 points on several trading days, with the largest drop being 600 points on September 13th. However, yesterday's decline has caused panic in the market.
But there has also never been a day like yesterday with such a significant increase, with the highest increase reaching 1200 points.
This was mainly due to the central bank's serious warning at an important meeting, reminding any institution not to easily bet on the unilateral appreciation or depreciation of the exchange rate.
According to the central bank's official website, the foreign exchange market self-discipline mechanism held a televised meeting on the 27th, analyzing the current operation of the foreign exchange market, requiring all members to consciously maintain the stability of the foreign exchange market, and issuing a stern warning that betting on the unilateral appreciation or depreciation of the yuan is inevitably "a long-term bet must lose!"
03
Although the depreciation rate of the yuan has been relatively fast and the range has been relatively large over this period, foreign institutions also dare not easily increase their short positions on the yuan.
Some senior foreign exchange traders in Hong Kong found that even though the yuan exchange rate broke through 7.2 yesterday, there was no large amount of short positions in the foreign exchange market.