Exchange Rate Trends - In October, the USD index rose by 2.1% to 99.8, influenced by the depreciation of major non-USD currencies and hawkish Fed rate cut expectations[3] - The RMB central parity rate appreciated by 175 basis points to 7.0880 against the USD, with onshore and offshore rates fluctuating around 7.1135 and 7.1224 respectively by month-end[4] - The CFETS RMB exchange rate index, BIS currency basket, and SDR currency basket indices increased by 0.9%, 1.2%, and 1.1% respectively, indicating a continued strengthening of the RMB against a basket of currencies[5] Cross-Border Capital Flows - In October, cross-border capital flows shifted from a small net outflow to a significant net inflow of $511 billion, marking a new high for the year[10] - The foreign exchange income and expenditure of banks decreased by $581 billion and $1,123 billion respectively, reflecting seasonal effects from the "Double Festival" holidays[10] - The RMB's foreign exchange payment returned to a surplus of $16 billion, with a significant increase of $414 billion from the previous month[10] Foreign Investment Dynamics - Foreign investment in RMB-denominated bonds decreased for the sixth consecutive month, with a reduction of 542 billion yuan, indicating a cautious approach from foreign investors[11] - In October, foreign capital inflow into the Chinese stock market slowed to $22 billion, down from previous months' higher inflows[12] - The net inflow of foreign securities investment in emerging markets was $269 billion, with $94 billion flowing into markets outside of China, highlighting a shift in investor focus[12] Market Sentiment and Risks - The market sentiment showed increased risk aversion due to geopolitical tensions and uncertainties in monetary policy adjustments by major central banks[2] - The report warns of potential risks from geopolitical factors, unexpected changes in central bank policies, and domestic economic recovery falling short of expectations[40]