Core Viewpoint - The report from Renmin University indicates that the Renminbi Internationalization Index (RII) is on an upward trend, reflecting a gradual adjustment in the international monetary landscape driven by the internationalization of the Renminbi [1][3]. Summary by Relevant Sections Renminbi Internationalization Index (RII) - The RII values for the end of each quarter in 2024 are projected to be 4.84, 7.40, 6.30, and 5.68, with an annual average of 6.06, representing an approximate 11% increase from the 2023 average of 5.46 [1]. - The upward trend in RII indicates a significant increase in the Renminbi's role in trade settlement, financial transactions, and official reserves [1][2]. Key Drivers of Growth - The primary drivers for the growth of RII in 2024 are direct investment transactions and cross-border trade settlements, contributing 83.48% and 27.25% respectively [1]. - The highest growth rates in global shares for Renminbi loans and direct investments are 46.65% and 16.82%, marking them as highlights for the year [2]. Geopolitical Economic Risks - The report emphasizes that global geopolitical economic risks are expected to deepen, stemming from internal contradictions within the global economic and financial structure [3]. - The negative spillover effects of these risks impact China's real economy and financial markets, as well as the international trade and investment system [3]. Global Payment System Dynamics - The report notes a trend towards diversification in the global payment system and official reserve currencies, which correlates with the rise in the geopolitical risk index and the RII [4].

Core Insights - The dominance of the US dollar is facing uncertainty due to geopolitical factors, with its share in global foreign exchange reserves at approximately 58%, the lowest since 1994, while the euro accounts for about 20% [1][2] - European Central Bank President Christine Lagarde emphasizes the need to strengthen the euro's international standing by enhancing geopolitical, economic, and legal foundations [1] - The euro has appreciated significantly against the dollar, rising over 9.5% since the beginning of the year, reaching its highest level since December 2021 [1] Group 1: Euro's Position and Challenges - Lagarde's call to enhance the euro's international status aims to promote trade denominated in euros, reducing Europe's vulnerability to unstable capital flows [2] - Despite the euro's recent strength, challenges remain, including lower European external debt issuance compared to the US and lower returns on euro-denominated assets, which hinder the euro's liquidity and market demand [3] - The potential for the euro to replace the dollar as a reserve currency is deemed unrealistic in the short term, as the US economy's fundamentals still outperform those of Europe [4] Group 2: Market Reactions and Future Outlook - The recent rebound in the US dollar index is attributed to a significant increase in the US consumer confidence index, which rose to 98 in May, marking the largest monthly increase in four years [5] - Analysts express caution regarding the dollar's future, noting ongoing concerns about US economic growth and budget deficits, which may limit the dollar's upward momentum [6] - Non-sovereign currencies, such as stablecoins and commodities like gold, are expected to play a more significant role in the future financial landscape, as they are less tied to a single country's fiscal policies [7]