US Treasuries Break 5%, the US Dollar Strengthens—Why Has the Renminbi Risen Against the Trend and Broken Through 6.7?
Recently, the FX market has seen a rather counterintuitive phenomenon: despite the macro backdrop in which the Fed’s September policy meeting decided to raise rates by 25 basis points, lifting the federal funds target range to 3.75%–4.00%, and the 10-year US Treasury yield once again climbed above the 5% mark, the US dollar index has overall strengthened and most non-US currencies have come under pressure. Yet the RMB against the US dollar has shown exceptional independence. On September 18, both onshore and offshore RMB/USD exchange rates broke above the 6.70 level, reaching the highest since January 2023. Since Trump reasserted his influence over the international economic and trade landscape and market structure, the cumulative appreciation of the renminbi versus the US dollar has exceeded 7.5%. This trend not only deviates from the traditional logic that the China-US interest-rate differential determines the exchange rate,
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Recently, the FX market has seen a rather counterintuitive phenomenon: despite the macro backdrop in which the Fed’s September policy meeting decided to raise rates by 25 basis points, lifting the federal funds target range to 3.75%–4.00%, and the 10-year US Treasury yield once again climbed above the 5% mark, the US dollar index has overall strengthened and most non-US currencies have come under pressure. Yet the RMB against the US dollar has shown exceptional independence. On September 18, both onshore and offshore RMB/USD exchange rates broke above the 6.70 level, reaching the highest since January 2023. Since Trump reasserted his influence over the international economic and trade landscape and market structure, the cumulative appreciation of the renminbi versus the US dollar has exceeded 7.5%. This trend not only deviates from the traditional logic that the China-US interest-rate differential determines the exchange rate,
Follow me—don’t miss the quick read of the next trading screen.