Two-Way Fluctuations, Steady Gains: RMB Resilience Stands Out

On August 4, both the onshore and offshore renminbi (RMB) rose modestly against the U.S. dollar. Over a longer horizon, the RMB recorded noticeable gains versus the dollar in July, with the exchange rate hitting its highest level since March 2023. Analysts say a weaker U.S. dollar index and the release of domestic foreign-exchange settlement demand have jointly supported the RMB. With positive domestic and external factors combined, the RMB is expected to appreciate steadily in the next stage, maintaining strong resilience amid two-way fluctuations.

RMB Appreciates Moderately

On August 4, the onshore and offshore RMB both edged higher against the dollar. Wind data show that, as of 16:30, the onshore RMB closed at 6.7533 per dollar, up 10 pips from the previous close, with an intraday high of 6.7512; the offshore RMB was quoted at 6.7542, up 40 pips, with an intraday high of 6.7519.

Over July as a whole, the RMB remained in an appreciation trend against the dollar. Wind data show the onshore RMB gained 0.55% in July, with a mid-month high of 6.7456, the strongest since March 2023. The offshore RMB rose 0.57% in July, with a mid-month high of 6.7422, also the strongest since March 2023.

From the external side, the U.S. dollar index weakened noticeably in July, and most non-dollar currencies appreciated, with the RMB's advance relatively moderate. "Looking at the full month of July, the dollar index was stable first and then fell, with the decline concentrated after the Federal Open Market Committee (FOMC) meeting, when the market became concerned about policy uncertainty surrounding Warsh, and the dollar index weakened more visibly," said Li Liuyang, chief FX analyst at CICC Research.

From the domestic side, the moderate release of FX settlement demand and a relatively balanced FX supply-demand picture have together supported a steady, slightly stronger RMB. Li Liuyang noted that net FX settlement in June was at a relatively high level for the year, and the central parity rate also refreshed its year-to-date high in July, with domestic factors underpinning the RMB's steady performance last month.

Data released by the China Foreign Exchange Trade System, authorized by the People's Bank of China, showed that the central parity rate of the RMB against the dollar was set at 6.7892 on July 30, a new year-to-date high.

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