The Political Tempest in Euro Push the Dollar Value Higher

On May 29, the RMB against the dollar in the middle price is set at 6.4021, compared with the previous trading day cut 59 points, median value to the lowest since January 22, 2018, and for the fourth consecutive trading day .On a day, the RMB against the dollar in the middle price is 6.3962, ticket is the official close at 6.3938, 30 close at 6.4000.

Days of onshore and offshore RMB exchange rate also follow the middle price, now both below the 6.40 mark. 
International currency, overnight dollar rose for a second straight day, the euro fell to their lowest level in more than six months, due to the political turmoil in Italy. After Italy's President vetoed a five-star movement and the northern league, a proposed suspected opie economy minister. The move prompted a bipartisan gave up efforts to form a government, or lead to fall early elections.

Daiwa securities senior currency strategist at Yukio Ishizaki, said "the difference between the eurozone government bond yields sharply amplification, the market participants unprepared, has become a key factor in the selling of emergence of the euro. Basically, the German government bond yields are falling, and this is against the euro."

He also pointed out that "in the may before the euro bullish phase of a large number of euro long positions are still in the field to be close, it seems the euro will continue to decline in endlessly."

Traders said that the future will focus on the situation in Europe under the influence of the Italian politics, and rising beauty refers to the accumulated risk callback. If the dollar for Europe's political turmoil continued high, the RMB exchange rate may also be indirectly under pressure.

Market participants said, in the short term, if the dollar strengthened further, there still exists certain downward pressure on the RMB, but subsequent movements of the dollar index remains to be seen, and considering the factors such as domestic economic fundamentals, the balance between supply and demand of foreign exchange, the RMB's depreciation against the dollar this year pressure and risk is still manageable, outflow pressure is not big.