Core Viewpoint - The A-share market has been performing strongly since April, with expectations of reaching 4,000 points this year, which correlates with the strengthening of the RMB against the USD [1][2]. Group 1: A-share Market Performance - The A-share market has surged, reaching a peak of 3,900 points, leading to widespread confidence in surpassing 4,000 points within the year [1]. - As of August 21, foreign institutional investors held approximately 2.5 trillion RMB in A-shares, reflecting an 8% increase from the end of 2024 [8]. Group 2: RMB Exchange Rate Dynamics - The offshore RMB exchange rate against the USD has risen to 7.12, indicating a correlation with the A-share market's performance [2]. - A rising economy typically leads to higher asset returns, which in turn supports the appreciation of the currency [3][6]. - The increase in asset returns due to a booming economy results in a higher demand for RMB, thereby driving up its value [7]. Group 3: External Influences on Currency Strength - The recent dismissal of Federal Reserve Governor Lisa Cook by President Trump raises concerns about the independence of the Federal Reserve, potentially impacting the credibility of the USD [10]. - A decline in the credibility of the USD could benefit other currencies, including the RMB, contributing to its recent strength [11].