Core Viewpoint - The recent appreciation of the RMB against the USD is attributed to both internal and external factors, indicating a potential long-term upward trend in the RMB exchange rate [4][10][12]. Exchange Rate Movements - On October 16, the RMB to USD central parity rate was reported at 7.0968, an increase of 27 basis points from the previous trading day [1]. - The RMB has appreciated over 900 points against the USD this year, with an onshore appreciation of 2.40% and an offshore appreciation exceeding 2.8% [3][4]. Economic Indicators - The core CPI in China rose by 1.0% year-on-year, marking the first increase back to 1% in 19 months, reflecting the effectiveness of macroeconomic policies [3]. - The strong performance of the A-share market has attracted international capital back to Chinese assets, increasing demand for the RMB [4][11]. External Influences - The risk of economic recession in the US and the softening labor market have prompted the Federal Reserve to signal a potential interest rate cut, putting downward pressure on the USD index [4][10]. - The market anticipates a nearly 100% probability of a 25 basis point rate cut by the Federal Reserve in October following recent economic data [3]. Long-term Outlook - Analysts suggest that the RMB may have entered a long-term appreciation cycle, driven by the Federal Reserve's easing monetary policy and the relative economic strength of China [12][14]. - The RMB's appreciation is expected to be supported by structural economic adjustments and increased attractiveness of RMB-denominated assets [11][15].