It has always been one of the common methods in futures market to use the market fluctuations of local currency and foreign currency for internal and external hedging transactions.
In the past year, the RMB exchange rate has been significantly high and low and has a good trend, which provides a good opportunity. So, will there be similar or better transactions in the new year?
The fluctuation range of offshore RMB futures last year was 6.7-7.36, in which the high point was close to the high point of the previous year, while the low point was near the central axis of trading in 2022. The distinct price center made the logic of high throwing and low sucking very smooth.
Coupled with the official media's article on suppressing RMB under 6.4 and the choice of singing more RMB above 7.3, investors and traders have a clear signal of entering and leaving. If this year's market continues to fluctuate within a large range of 6.4-7.4, the same method can make profit.
On the other hand, if the price has made a new breakthrough and formed a trend, the old trading ideas will no longer be effective. Therefore, it is the key to judge whether RMB will have a bigger market in 2024 driven by internal and external factors. The following points, we think, can be worth paying attention to and tracking.
First of all, it is naturally the comparison of monetary policy, which can also be simply understood as the change of interest rate spread.
At present, the Federal Reserve has given the direction of cutting interest rates this year, so the variable depends on whether the People's Bank of China will be faster and more radical in its loose pace. Last year, there were voices that RMB and Japanese yen would become financing currencies, but the situation has not yet developed to that point. Exceeding the expected flood irrigation, it brings the depreciation pressure of RMB. A quick and swift rate cut by the Federal Reserve will help the RMB appreciate, but under the existing conditions, it is unlikely to help the RMB make a new breakthrough.
Secondly, how to make progress in China-US relations under the 2024 US election. Although it is difficult to change the general direction that one mountain can't tolerate two tigers, after the third quarter of last year, there was a honeymoon period on both sides to a certain extent, which also helped to maintain a stable exchange rate. If there is a big change in the policy of the new American government, it will inevitably lead to the RMB market. Relative pro-China benefits RMB, while vice versa.
Finally, on the domestic economic changes and external geopolitical topics that the market has been focusing on, we tend that how the economy develops will not change the limit of the large range of RMB. In geopolitics, unless it is a topic of direct influence, it will only bring very limited intraday fluctuations. However, if there is a big move, then the market must be huge, and this is understood, so we will not discuss it.
On the whole, we expect that the probability that the RMB will continue to operate within the range in the first half of the year or even in the third quarter is very high.
In the fluctuation range of last year, the RMB will see more when it is in place, and futures are multi-outer space products; If the RMB rebounds enough, it will be bearish on the exchange rate, and there will be more internal and external futures. If there is really explosive news or news, you can simply make a decision according to the intuitive good or bad influence and the knee-jerk reflex trend of the market.
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