Core Viewpoints - Since 2025, the RMB/USD exchange rate has experienced fluctuations, initially appreciating, then depreciating, and finally appreciating again, maintaining relative strength overall [3][4] - The RMB has appreciated by 1.79% against the USD, while the USD index has decreased by 9.97% during the same period, indicating a trend of RMB appreciation against the USD and depreciation against a basket of currencies [4] - The rapid decline of the USD index has exceeded market expectations, influenced by various factors including US economic policies and trade tariffs [4][5] Exchange Rate Trends - From the beginning of the year to March 18, the RMB appreciated from 7.3 to 7.22, then weakened to 7.35 by April 9, before appreciating again to around 7.17 by July 25 [4] - The CFETS RMB exchange rate index fell from 102.1 at the beginning of the year to approximately 95.7 by July 25, reflecting the RMB's performance against a basket of currencies [4] External Factors Influencing RMB - The decline in the USD index is attributed to several factors, including market expectations of US economic policies and the impact of tariffs on economic growth [4][9] - The uncertainty surrounding US tariffs and the sustainability of US debt has weakened confidence in USD assets, which may constrain the USD index's performance in the medium term [4][5] Domestic Economic Environment - The stable domestic economic policy environment has supported the RMB exchange rate, with a focus on stabilizing employment and enterprises [5][10] - In the first half of the year, exports grew by 5.9%, demonstrating resilience in the foreign trade sector, which has positively impacted the RMB [5][11] Future Outlook for RMB - The RMB exchange rate will continue to be influenced by both internal and external factors, including the USD index and tariff policies, as well as domestic economic recovery and policy management expectations [8][10] - The USD index is expected to experience complex movements, with potential for both upward and downward pressures [9][10] - Domestic macroeconomic policies are anticipated to remain accommodative, supporting industrial profits and enhancing the attractiveness of RMB assets [10][11] Policy Management - Authorities are committed to maintaining a stable exchange rate, utilizing various strategies to manage expectations and liquidity in offshore markets [12] - Since May, the RMB middle rate has aligned closely with onshore and offshore spot rates, indicating stability in the exchange rate [12]

2025年7月29日银行间外汇市场人民币汇率中间价 美元/人民币报7.1511，上调（人民币贬值）44点； 欧元/人民币报8.3063，下调1036点； 港元/人民币报0.91102，上调5.1点； 英镑/人民币报9.5766，下调395点； 澳元/人民币报4.6786，下调248点； 加元/人民币报5.2209，下调21点； 100日元/人民币报4.8225，下调176点； 人民币/俄罗斯卢布报11.3531，上调2719点； 新西兰元/人民币报4.2862，下调241点； 人民币/林吉特报0.59066，上调5.6点； 瑞士法郎/人民币报8.9221，下调724点； 新加坡元/人民币报5.5683，下调167点。 ...

1. Report Industry Investment Rating - Not provided in the content 2. Core Views of the Report - For gold futures, the overall trend of Shanghai gold futures is in an upward channel and may be at the end of the trend. For silver futures, the overall trend of Shanghai silver futures is steadily rising and is also at the end of the trend. It is recommended to wait and see for both gold and silver futures [7][34] 3. Summary by Directory Gold Futures 3.1 Mid - term Market Analysis - The overall trend of Shanghai gold futures is in an upward channel and may be at the end of the trend. Last week, gold was affected by factors such as the US dollar index, US economic data, Fed policy expectations, geopolitical risks, RMB exchange rate, domestic infrastructure policies, market sentiment, capital flow, and technical aspects. The US dollar index alternately suppressed and supported the gold price. The mild US economic data, stable Fed policy expectations, and geopolitical risks made the gold price seek a direction in the fluctuations. Domestic infrastructure policies and RMB exchange rate fluctuations provided additional support. It is recommended to wait and see [7][8] 3.2 Variety Trading Strategy - Last week, it was expected that the gold main contract 2510 would oscillate, and grid trading was recommended in the 760 - 785 range. This week, it is still expected to oscillate, and grid trading is recommended in the 750 - 800 range [11][12] 3.3 Relevant Data Situation - The content presents the historical data trends of Shanghai gold market trends, COMEX gold market trends, SPDR gold ETF holdings, COMEX gold inventory, US 10 - year Treasury bond yields, US dollar index, US dollar against offshore RMB, gold - silver ratio, Shanghai gold basis, and gold internal - external price difference [19][22][24] Silver Futures 3.1 Mid - term Market Analysis - The overall trend of Shanghai silver futures is steadily rising and is at the end of the trend. Last week, the US - Japan trade agreement improved market risk appetite, but silver was less suppressed due to its stronger industrial attributes. Industrial demand, especially in the photovoltaic and new - energy vehicle fields, provided support. Next week, silver prices will be affected by US economic data, China - US trade negotiation progress, geopolitical risks, and domestic policy orientation. If there is no substantial progress in China - US trade negotiations, silver prices are expected to remain strong; otherwise, silver may face some downward pressure. It is recommended to wait and see [34][36] 3.2 Variety Trading Strategy - Last week, it was expected that the silver contract 2510 would run strongly, with the lower support range of 8800 - 8900 and the upper pressure range of 9450 - 9550. This week, it is still expected to run strongly, with the lower support range of 8800 - 8900 and the upper pressure range of 9200 - 9300 [38] 3.3 Relevant Data Situation - The content shows the historical data trends of Shanghai silver market trends, COMEX silver market trends, SLV silver ETF holdings, COMEX silver inventory, Shanghai silver basis, and silver internal - external price difference [44][46][48]

Core Viewpoint - China's economy grew by 5.3% in the first half of the year, exceeding the annual growth target, but the outlook for the second half remains cautious due to pressures from tariffs, real estate, and limited fiscal capacity [1][3]. Group 1: Economic Growth and Policy Recommendations - The report emphasizes the need for stronger counter-cyclical policies to achieve the annual economic growth target, given the marginal weakening of growth momentum in Q2 compared to Q1 [3][4]. - It suggests that the government should utilize public budget funds and consider issuing an additional 2.3 trillion yuan in government bonds to support fiscal spending [4]. - The report highlights the importance of urban renewal projects as a critical area for expanding domestic demand, especially as the effectiveness of existing policies like "trade-in" diminishes over time [4][5]. Group 2: Monetary Policy and Interest Rates - The report recommends lowering policy interest rates to guide market rates downwards, which is essential for restoring balance between private sector savings and investments [4][5]. - It notes that the current global environment, with many developed countries in a rate-cutting cycle, provides a favorable backdrop for such monetary easing [4]. Group 3: Currency Valuation and Exchange Rate Dynamics - The report discusses the depreciation of the RMB's real effective exchange rate by over 15% since 2022, attributing this to persistent domestic demand shortages [7][8]. - It emphasizes that the comparison of expected returns between RMB assets and foreign exchange assets is crucial for determining the supply and demand in the foreign exchange market [8]. - The report suggests that timely and sufficient counter-cyclical policies are necessary to achieve a reasonable valuation of the RMB's real effective exchange rate [8][9]. Group 4: Stablecoin Development and Internationalization of RMB - The report outlines the structural changes in the RMB exchange rate, including a shift in expectations and a changing interest rate environment, which could support the internationalization of the RMB [11]. - It discusses the potential pathways for advancing RMB stablecoin trials, emphasizing the need for onshore stablecoins due to the lack of application scenarios for offshore stablecoins [12]. - The report highlights the importance of strict regulation in the development of RMB stablecoins to avoid missing critical opportunities in the evolving financial landscape [12].

Market Performance - The film and cinema sector is leading the gains, with stocks like Happiness Blue Sea rising over 23%, and other companies such as Hengdian Film and China Film increasing by over 3% [1][2] - The A-share market opened with all three major indices rising: the Shanghai Composite Index increased by 0.02%, the Shenzhen Component Index by 0.07%, and the ChiNext Index by 0.27% [1][2] Company Updates - CK Hutchison Holdings (长和) opened nearly 1% higher, reaching a multi-year high [3] - CK Hutchison announced that the exclusive negotiation period with a consortium has ended, and discussions are ongoing to invite major strategic investors from mainland China to join the consortium [5] Sector Highlights - The engineering machinery and 6G sectors are also showing active performance [1][2] - The innovation drug concept is experiencing significant gains, with Hengrui Medicine rising over 10% due to a collaboration with GSK worth up to $12 billion [6]

今日必读🧪美欧协议将大部分关税定在15%💴专家建言增加人民币汇率弹性🔥特朗普以关税威胁敦促泰柬停火获取免费中文电子报《彭博财经早茶》，洞悉全球市场动态。Catch up on what's moving China's markets in our free Chinese language newsletter. https://t.co/lgpjtJwTbM ...

Core Viewpoint - The Chinese foreign exchange market is operating smoothly with a balanced supply and demand, stable foreign exchange reserves, and a resilient foreign trade environment, despite complex global conditions [1][5]. Exchange Rate Dynamics - The RMB exchange rate has shown increased two-way volatility and resilience, with the onshore RMB appreciating by 1,332 basis points and the offshore RMB by 1,796 basis points against the USD in the first half of the year [2][3]. - The USD index has decreased by 10.79% in the same period, contributing to the RMB's strength [2]. - Market analysts expect the RMB to maintain a stable range between 7.1 and 7.3 against the USD in the second half of the year, with limited potential for the RMB to break below 7 [4]. Foreign Exchange Reserves - As of June 2025, China's foreign exchange reserves reached $33,174 billion, marking a month-on-month increase of $322 billion and a continuous growth for six months [5][6]. - The increase in reserves is attributed to the depreciation of the USD and the overall rise in global financial asset prices [5]. Gold Reserves - China's gold reserves stood at 73.9 million ounces (approximately 2,298.55 tons) as of June, with a month-on-month increase of 70,000 ounces [6]. - The gold reserves represent 7.32% of the total foreign exchange reserves, which is below the global average of around 15% [6]. Cross-Border Investment Reforms - The State Administration of Foreign Exchange has proposed reforms to facilitate cross-border investment and financing, aiming to optimize the business environment and support high-quality economic development [7]. - These reforms include nine specific policies to enhance foreign exchange management and promote stable foreign investment [7]. Future Outlook - The foreign exchange market is expected to remain stable, supported by a recovering economy, balanced international payments, and enhanced market resilience [8]. - The implementation of proactive macroeconomic policies and the promotion of domestic demand are anticipated to further stabilize the RMB exchange rate [8].

Group 1 - The potential impact of a return to an exchange rate of 6.2 RMB to 1 USD could significantly reduce the GDP gap between China and the US, with China's GDP potentially increasing from 140 trillion RMB to 23 trillion USD, representing over 75% of the US GDP [1][3] - China's GDP gap with the US once peaked at 70% of global GDP, but the shift towards high-end manufacturing and technological advancements has changed the economic landscape, indicating a substantial accumulation of strength over recent years [3][5] - The transformation of China's economy from a low-cost manufacturing base to a global technology center is evident, particularly in sectors like high-speed rail, artificial intelligence, and semiconductors, showcasing China's competitive edge in international markets [5][7] Group 2 - Future GDP growth in China is expected to continue, especially with further integration into high-tech industries and international markets, potentially allowing China's GDP to approach or exceed that of the US [7][9] - The advancement of China's military-industrial complex, supported by technological progress, is enhancing its global standing across various sectors, including aerospace and cybersecurity, contributing to overall national strength [7][9] - The combination of military manufacturing and advanced technology is expected to significantly boost China's production capacity and technological reserves, enhancing its influence beyond just economic metrics [9]

Group 1 - The interbank foreign exchange market showed stable trading with an average daily transaction volume of $208.2 billion in June, a year-on-year increase of 15.7% [2] - The average daily trading volume of the RMB foreign exchange market was $152.4 billion, up 8.9% year-on-year, while foreign currency trading grew over 30% [2] - The US dollar index experienced fluctuations, initially rising and then declining, ending the month at 96.77, a depreciation of 2.68% [3] Group 2 - The RMB exchange rate showed a steady increase, fluctuating between 7.17 and 7.19, with a month-end value of 7.1656, appreciating by 0.94% [4] - The CFETS RMB exchange rate index fell to its lowest level since 2021, closing at 95.35, a cumulative depreciation of 0.64% for the month [4] - The offshore and onshore exchange rates continued to align closely, with the average daily deviation being minimal [5] Group 3 - The foreign exchange market saw a shift towards net selling, with an average daily net selling of $8.51 million, an increase of $5.84 million from May [6] - The market sentiment index rose to 62.78, slightly above the historical average, indicating a stable trading environment [6] Group 4 - The implied volatility of foreign exchange options decreased, with the average daily transaction volume reaching $8.28 billion, a 6.12% increase from the previous month [7] - The short-term implied volatility for the RMB against the USD fell from 3.8% to around 3.5% [7] Group 5 - The interest rate differential between China and the US continued to narrow, with the 10-year US Treasury yield dropping to 4.23% by month-end [8] - The 1-year swap points increased to -1866 basis points, the highest in nearly eight months, indicating a shift in market dynamics [8][9] Group 6 - The US dollar liquidity remained loose, with the domestic dollar financing costs showing a clear advantage [10] - The overnight interest rate differential between domestic and foreign markets remained negative, reaching a new high of -18 basis points by month-end [11]

Summary of Key Points from Conference Call Industry Overview - The discussion revolves around the macroeconomic perspective on exchange rates, particularly focusing on the US dollar, euro, and Chinese yuan [2][3][4]. Core Insights and Arguments 1. **Divergent Views on US Dollar**: There is a split within the US government regarding the dollar's strength. White House advisors advocate for a weaker dollar to enhance trade, while the Treasury Secretary emphasizes a strong dollar to attract capital [2][4][9]. 2. **Challenges in Exchange Rate Prediction**: Predicting exchange rates is complex due to multiple influencing factors. Even authoritative bodies like the IMF struggle to provide accurate forecasts [2][5][10][11]. 3. **Impact of Capital Flows**: Recent trends show that capital flows significantly influence exchange rates, with foreign exchange trading volumes far exceeding international trade volumes [2][8][14]. 4. **US Trade Deficit and Dollar Stability**: Despite a long-term trade deficit, the influx of foreign investment has prevented systemic depreciation of the dollar [2][15]. 5. **Foreign Investment in US Assets**: In 2023-2024, foreign investments accounted for 70% of net purchases in US equities, supporting the dollar despite high fiscal and trade deficits [2][15]. 6. **Potential for Yuan Strengthening**: The accumulation of $1.7 trillion in unconverted funds by Chinese exporters may lead to a stronger yuan, especially in the context of US debt monetization [2][17]. 7. **Market Reactions to Dollar Depreciation**: A weaker dollar is expected to benefit A-shares and Hong Kong stocks, enhancing risk appetite and liquidity in these markets [2][19]. 8. **Long-term Outlook for Global Markets**: The expectation of increased fiscal spending in the US and Europe may boost global demand and investment, positively impacting stock markets and commodities [2][19]. Additional Important Content 1. **Complex Interactions Among Currencies**: The interplay between major currencies is intricate, with recent trends showing the yuan's rise, the dollar's rebound, and the euro's slight weakening [3][7]. 2. **The Role of Theoretical Perspectives**: Different economic theories (e.g., classical vs. Keynesian) provide varying insights into the factors influencing exchange rates, highlighting the need for a comprehensive approach [10][11]. 3. **Current Trends in Currency Behavior**: The yuan's recent appreciation against the dollar is not indicative of a clear upward trend, as market dynamics remain complex and influenced by various factors [22][23]. 4. **Implications for Exports**: The yuan's appreciation against the dollar has a limited negative impact on overall exports, supported by adjustments in a basket of currencies [20][23]. 5. **Future of US Debt and Monetary Policy**: The US may adopt measures to manage increasing debt levels, potentially leading to a sustained pressure on the dollar in the medium to long term [18][19]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the currency markets and their implications for various stakeholders.