Core Viewpoint - The recent appreciation of the RMB against the USD reflects a stable economic environment and effective monetary policies, with the RMB maintaining a reasonable equilibrium level despite external pressures [1][4][5]. Exchange Rate Trends - The onshore RMB to USD exchange rate has rebounded, recovering the 7.2 mark, with a year-to-date appreciation of 1.9% as of mid-2023 [1][4]. - As of July 23, the central parity rate was set at 7.1414 RMB per USD, marking a 46 basis point increase from the previous day [1]. - The offshore RMB was trading around 7.15890, up over 1100 basis points from the previous day [1]. Economic Factors Influencing RMB - Domestic economic recovery is evident, with a GDP growth of 5.4% year-on-year in Q1 2023 [5]. - Market expectations suggest a potential interest rate cut by the Federal Reserve, leading to a narrowing of interest rate differentials between China and the US [5]. - The balance of international payments remains stable, with RMB assets retaining attractiveness for cross-border capital flows [5]. Market Sentiment and Predictions - The foreign exchange market is characterized by rational trading behavior, with no significant unilateral expectations for RMB appreciation or depreciation [1][4]. - Analysts predict that the RMB will stabilize at a reasonable equilibrium level in the second half of 2023, supported by easing global tariff risks and a recovery in capital markets [5][6]. Global Currency Trends - The dollar index has weakened significantly, dropping 10.8% in the first half of 2023, the worst performance since 1973, leading to a shift in global asset allocation away from USD [2][9]. - The IMF reports a decline in the dollar's share of global foreign exchange reserves to 57.7%, with increasing interest in gold, euros, and RMB as alternative safe-haven assets [2][9]. RMB as a Reserve Currency - The RMB's status as a reserve currency is on the rise, with 30% of central banks planning to increase their RMB reserves over the next decade [9][10]. - The RMB has become the second-largest trade financing currency and the third-largest payment currency globally, reflecting its growing international acceptance [10]. Future Outlook - The RMB's internationalization is expected to continue, with a projected increase in its share of global reserves from the current level to 6% over the next decade [9][10]. - The ongoing diversification of currency reserves among central banks indicates a long-term trend towards increased RMB allocation, particularly in emerging markets [9][10].

Core Viewpoint - The recent rebound of the Renminbi (RMB) against the US dollar indicates a positive trend in the currency's valuation, with the onshore and offshore RMB both recovering above the 7.2 mark, reflecting an appreciation since the beginning of the year [1][4]. Exchange Rate Performance - As of July 23, the central parity rate of RMB against USD was set at 7.1414, an increase of 46 basis points from the previous trading day, marking the highest level since November 5, 2024 [1]. - On the same day, the onshore RMB was reported at 7.1605, up 151 basis points, while the offshore RMB hovered around 7.15890, rising over 1100 basis points [1]. Market Stability and Expectations - In the first half of the year, the RMB appreciated by 1.9% against the USD, maintaining a stable range between 7.15 and 7.35, which has helped stabilize the macroeconomy and international balance of payments [4]. - The foreign exchange market has shown stable expectations, with no significant unilateral appreciation or depreciation anticipated for the RMB [4]. Economic Factors Influencing RMB - The RMB's stability is supported by several factors: domestic economic recovery, narrowing interest rate differentials between China and the US, balanced international payments, and improved resilience in the foreign exchange market [5]. - The People's Bank of China (PBOC) emphasizes that it does not seek to gain international competitive advantage through currency depreciation, maintaining a clear stance on the importance of market-driven exchange rate formation [5]. Capital Inflows and Foreign Investment - The capital market is witnessing a resurgence, with significant foreign capital inflows into the Chinese market, particularly through the Stock Connect program, which has seen transaction volumes exceed previous levels [7]. - Foreign investors are expected to continue increasing their allocation to RMB-denominated assets, supported by China's economic fundamentals and the demand for diversified global asset allocation [7]. Global Currency Trends - The US dollar's dominance is declining, with a significant drop in its share of global foreign exchange reserves, while the RMB is increasingly viewed as a desirable reserve asset by central banks [9]. - A report indicates that 30% of central banks plan to increase their RMB reserves over the next decade, suggesting a potential doubling of the RMB's share in global reserves to 6% [9]. Conclusion on RMB's International Position - The RMB has steadily risen in international status, becoming the second-largest trade financing currency and the third-largest payment currency globally [10]. - Despite the challenges faced by the RMB, including limited capacity for currency export due to China's trade surplus, the trend towards a multipolar currency system is evident, with the RMB gaining traction as a viable alternative to the US dollar [10].

Group 1 - The recent rebound of the US dollar is attributed to lowered expectations for interest rate cuts by the Federal Reserve, improved outlook for a "soft landing" in the US economy, and diminishing uncertainty regarding tariffs [1] - The US dollar index has shown signs of recovery due to a slight increase in inflation risks as indicated by the Consumer Price Index (CPI) for June, which has led to a minor rebound in US Treasury yields and the dollar index [1][2] - Analysts believe that the long-term trend of a weaker dollar is supported by the ongoing diversification of the international monetary system, with the dollar's global reserve share falling below 60% for ten consecutive quarters [2] Group 2 - The recent appreciation of the Chinese yuan indicates that the central bank may be guiding the currency towards a moderate strengthening, with expectations that it could maintain its strength in the short term [3] - The yuan's performance is closely linked to the outlook for the US dollar, with potential for appreciation if the dollar continues to weaken, although significant fluctuations are not anticipated [3][5] - Analysts predict that the yuan will likely fluctuate within the range of 7.1 to 7.3 against the dollar for most of the second half of the year, despite a potential weakening of the dollar index [5] Group 3 - The increase in cross-border RMB settlement amounts reflects the acceleration of RMB internationalization, with significant inflows indicating foreign confidence in Chinese assets [6] - In the first half of the year, cross-border RMB settlement amounted to 8.3 trillion yuan, with trade and direct investment contributing significantly to this figure [5][6]

Core Viewpoint - The article discusses the stability of the US dollar's reserve share despite the ongoing trend of de-dollarization and the impact of US economic policies under Trump, highlighting the complexities of international currency dynamics and capital flows [1][14]. Group 1: Dollar Reserve Share Stability - As of the end of Q1 this year, the dollar's share in global foreign exchange reserves was 57.74%, a slight decrease of 0.05 percentage points from the previous quarter but an increase of 0.46 percentage points from the previous year's low [2][11]. - The dollar's reserve share has remained below 60% for ten consecutive quarters, marking a significant decline from around 70% in the early 2000s, indicating a trend towards a multipolar international monetary system [14][15]. Group 2: Capital Flows and Foreign Investment - In Q1 this year, the net inflow of international securities capital into the US was $447.5 billion, significantly higher than the $43 billion in the same period last year, with private foreign investment showing a notable recovery [6][11]. - Official foreign investment in US securities totaled $65.671 trillion, with a net purchase of $91.5 billion, reflecting a 15.8% increase [11]. Group 3: Composition of Foreign Holdings - Official foreign investors held $38.356 trillion in US Treasury securities, an increase of $175.9 billion from the end of last year, with net purchases of $138.3 billion, a 114% year-on-year increase [8][9]. - The holdings of US stocks by official foreign investors decreased by $112.2 billion, with net sales of $26.9 billion, indicating a shift in investment strategy [9][10]. Group 4: Trends in Other Reserve Currencies - The share of non-traditional reserve currencies has increased, with a cumulative rise of 1.84 percentage points from Q1 2022 to Q1 2025, surpassing the decline in the dollar's share [15]. - The share of gold in global reserves has risen significantly, with central banks increasingly favoring gold as a hedge against economic and geopolitical uncertainties [20][21].

Core Viewpoint - The stability of the US dollar's reserve share does not contradict the accelerating trend of a multipolar international monetary system, despite recent discussions about "de-dollarization" and the impact of US economic policies [1][11]. Group 1: Dollar Reserve Share Data - As of the end of Q1 this year, the US dollar accounted for 57.74% of global foreign exchange reserves, a slight decrease of 0.05 percentage points from the previous quarter but an increase of 0.46 percentage points from the previous year's low [2]. - The dollar's reserve share has remained below 60% for ten consecutive quarters, marking its lowest level since data collection began in 1999 [11]. Group 2: Foreign Investment in US Securities - In Q1, net inflows of international capital into US securities reached $447.5 billion, significantly higher than the $43 billion net inflow in the same period last year [3]. - Official foreign investment in US Treasury securities totaled $38,356 billion by the end of Q1, with a net purchase of $138.3 billion, reflecting a year-on-year increase of 114% [5]. - The total balance of official foreign investment in four major categories of US securities was $65,671 billion, with a net purchase of $91.5 billion, representing a growth of 15.8% [8]. Group 3: Trends in Other Reserve Currencies - In Q1, the euro, pound, and Swiss franc reserves increased by $58.7 billion, $61 billion, and $68.4 billion respectively, although these increases were lower than the dollar's reserve growth [9]. - The share of non-traditional reserve currencies has risen, with a cumulative increase of 1.84 percentage points from Q1 2022 to Q1 2025, surpassing the decline in the dollar's share [12]. Group 4: Gold as a Reserve Asset - The global gold reserve ratio has increased from 13.8% to 22.7% between Q1 2022 and Q1 2025, indicating a significant shift towards gold as a reserve asset [13]. - By the end of Q1 this year, gold reserves accounted for 20% of global reserve assets, making it the second-largest reserve asset after the dollar [14]. Group 5: Central Bank Attitudes Towards Gold - A recent survey indicated that 95% of central banks expect to continue increasing their gold reserves over the next 12 months, reflecting a growing preference for gold as a hedge against economic and geopolitical uncertainties [15].

Group 1: Federal Reserve and Interest Rates - Morgan Stanley's report dampens market expectations for interest rate cuts by the Federal Reserve in July and September, citing strong inflation data and robust employment reports as key factors [2] - The report indicates that the support for rate cuts is weak, with seven policymakers predicting no cuts this year, contrasting with ongoing pressure from Trump [2] Group 2: Trump's Trade Policies - Trump's erratic behavior has become a significant source of uncertainty for the global economy, with conflicting signals regarding tariff extensions [4] - The potential for new tariffs on industries such as pharmaceuticals, semiconductors, and commercial aircraft is under close scrutiny, raising concerns about the impact on global trade [6] Group 3: Economic Implications of Tariffs - Tariffs are expected to increase inflation, complicating the Federal Reserve's policy decisions and potentially leading to friction between the government and the central bank [8] - The rise of protectionism and trade fragmentation is exacerbating the decline in economic growth and productivity, posing urgent threats to growth, inflation, and financial stability [8] Group 4: Economic Forecasts and Market Reactions - A survey indicates that over 90% of economists are concerned about Trump's policies undermining the dollar's safe-haven status, with predictions of rising U.S. federal debt [11] - Following the announcement of tariffs, global stock markets experienced volatility, and the dollar depreciated, leading to expectations that 10-year Treasury yields could exceed 5% by mid-next year [11] Group 5: Federal Reserve Independence - Trump's interference with the Federal Reserve has raised alarms among former officials, warning that it could lead to market chaos and undermine the Fed's credibility [13] - The potential for increased borrowing costs and capital flight from the dollar and U.S. Treasuries could challenge the Fed's ability to manage economic stability [13] Group 6: Future Economic Uncertainty - If Trump opts for reciprocal tariffs instead of extensions, both the economic outlook and the Federal Reserve's rate-cutting policies will face greater uncertainty, leading to a more severe global economic test [15]

Core Insights - The "2025 China Enterprises Going Global Summit" was held in Shenzhen, focusing on creating a high-end platform for Chinese companies to address challenges in globalization and explore win-win transformation paths [1] Group 1: Economic Analysis - The former president of the Bank of China, Li Lihui, analyzed the structural contradictions in the U.S. financial situation, highlighting a significant trade imbalance with annual trade deficits exceeding $500 billion and a decline in manufacturing's contribution to GDP from 28.1% to 9.96% by Q3 2024 [4] - Li pointed out the severe fiscal imbalance in the U.S., with national debt reaching $36 trillion and annual interest payments exceeding $1 trillion [4] Group 2: U.S. Financial Strategy - To address its fiscal deficits, the U.S. relies on its international monetary hegemony, issuing dollars to purchase global goods, which is essential for maintaining its dominant position in the global financial system [4] - The recent introduction of a stablecoin initiative by the U.S. aims to tie stablecoins to the dollar, expanding the U.S. Treasury market and promoting dollarization in global financial markets, intensifying competition with China in the monetary and financial sectors [4] Group 3: Recommendations for Financial Development - Recommendations include improving the monetary policy framework and financial market structure to enhance policy transmission efficiency and increase direct financing [5] - Emphasis on financial technology and institutional innovation to reconstruct financial services and management processes, thereby improving the capacity to serve the real economy and enhancing regulatory efficiency [5] - Advocating for a multipolar international monetary system to reduce reliance on a single sovereign currency and enhance the resilience of the global financial system [5] Group 4: Cross-Border Payment and Currency Internationalization - The need for a diversified cross-border payment system is highlighted, with a focus on establishing digital payment infrastructure and multilateral payment systems to prevent the politicization of payment tools [6] - The push for the internationalization of the Renminbi is emphasized, with the currency already being the third-largest payment currency globally, aiming to expand its functions in international payments, financing, and reserves [6]

Group 1 - The global central banks are increasingly planning to increase their gold exposure, with over one-third of 75 central banks managing approximately $5 trillion in assets indicating such intentions, marking the highest proportion in at least five years [1] - The shift towards gold is driven by the need for asset safety and yield considerations, reflecting a reassessment of the US dollar's dominance in the international financial system and a rising awareness of geopolitical risks [1][3] - Approximately 70% of central banks express reluctance to increase their US dollar asset allocation due to concerns over the unpredictability of the US political environment, a figure that has doubled from the previous year [3][4] Group 2 - There is a growing preference for the Chinese yuan and the euro among central banks, with 16% planning to increase their euro exposure in the next two years, a significant rise from the previous year [3] - The yuan's internationalization is steadily increasing, gaining a more significant role in global trade and foreign exchange reserves, despite its current limited share [3] - The changes in central bank asset allocation behavior are seen as a forward-looking signal of market trends, indicating a response to the evolving geopolitical landscape and international financial order [5]

Core Viewpoint - The future of the international monetary system is likely to evolve towards a structure where a few sovereign currencies coexist, compete, and balance each other [1][4] Group 1: Evolution of the International Monetary System - The share of the euro in global foreign exchange reserves has increased to around 20%, second only to the US dollar since its inception [1] - The international status of the renminbi has steadily risen, becoming the second-largest trade financing currency globally after the 2008 financial crisis [1][2] - Historical shifts in dominant currencies, such as the Dutch guilder and the British pound, indicate that the status of international currencies is not fixed and can change with international dynamics and national competitiveness [2] Group 2: Impact of US Policies - The US has engaged in protectionist measures and created barriers that disrupt global supply chains, undermining long-term global trade stability [2] - The recent depreciation of the US dollar, with a decline of approximately 9% from January to June, reflects the instability of the dollar-centric global monetary system [1][2] Group 3: Opportunities for Other Currencies - The current situation presents a significant opportunity for the euro to strengthen its international position, as noted by the European Central Bank President [3] - The establishment of the Cross-Border Interbank Payment System (CIPS) with foreign institutions marks a step towards enhancing the use of the renminbi in international transactions [3] Group 4: Future Monetary Landscape - The international monetary system is expected to transition towards a multipolar structure, with the US dollar, euro, and renminbi playing significant roles [4] - Sovereign currency issuers must enhance fiscal discipline and financial regulation to mitigate risks and ensure stability in the global monetary system [4][5] - Coordination of monetary policies among major economies is crucial to avoid unintended policy conflicts and to manage the spillover effects of monetary policies [5]

Core Insights - The 2025 Lujiazui Forum highlighted the focus of Chinese financial authorities on cross-border payment systems, emphasizing the need for innovation and efficiency in this area [1][2] Group 1: Digital Currency and Cross-Border Payments - The People's Bank of China announced the establishment of a digital RMB international operation center in Shanghai to promote the internationalization of the digital currency and financial market development [1] - The rise of central bank digital currencies (CBDCs) and stablecoins is reshaping traditional payment systems, significantly reducing the cross-border payment chain [1][2] - The RMB has become the second-largest trade financing currency and the third-largest payment currency globally, reflecting its increasing international status [2] Group 2: Challenges and Innovations in Cross-Border Payment Systems - Traditional cross-border payment systems face challenges such as low efficiency and high costs, prompting a global call for improvement and diversification [2] - The multilateral central bank digital currency bridge project has shown promising results, with payments processed in 6 to 9 seconds, compared to 2 to 5 days for traditional methods, and nearly halving transaction costs [3] - The interoperability of payment systems is improving, with countries extending operational hours and adopting international messaging standards to enhance cross-border payment efficiency [4] Group 3: Regional Cooperation and Future Trends - The renewal of the bilateral currency swap agreement between the People's Bank of China and the Central Bank of Turkey supports the use of local currencies for cross-border settlements [2] - The trend towards a more efficient, secure, inclusive, and diversified global cross-border payment system is expected to continue [4]