The Only Way For Offshore Renminbi Derivatives To Return To Simple And Safe Haven

Since P broke its one-way appreciation in February this year, it has hit a 6.26 month low of 18 at the end of April, with a cumulative depreciation rate of about 3.5%.

Investors or speculators who bet on unilateral appreciation of the renminbi are all affected.

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< p > in the RMB a href= "//www.sjfzxm.com/news/index_cj.asp" > derivative /a > multivariate and complex offshore market, the selling option of RMB TRF (target redemption forward / foreign exchange cumulative option) has been exploded by double leverage risk, which has become one of the most obvious examples of the recent RMB derogatory.

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Huang Yanru, deputy general manager of credit rating agency Fitch, believes that if there is a demand for trade hedging, enterprises will not disappear in the market. After this incident, we will "back tobasic (return to fundamentals)" to do some of the simplest "a href=" //www.sjfzxm.com/news/ index_cj.asp "hedging products" /a, such as NDF (remote remittance) or simple option (Xuan Zequan). "P"

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< p > "as long as trade is still there, there will be a paction between US dollars and RMB. There is a demand for RMB derivatives in this paction. This trend will not change.

"Huang said.

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< p > after the request of the Hongkong and Taiwan regulatory authorities to strictly control the sale of TRF before and after the supervision of the largest offshore center of the renminbi, it shows that the characteristics of this commodity with limited profit and unlimited risk have already touched the red line of offshore regulators, especially for non professional investors.

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< p > however, the strict supervision of < a href= "//www.sjfzxm.com/news/index_cj.asp" > TRF < /a "does not mean that the related derivatives of RMB should be totally suppressed.

On the contrary, because the people's Bank of China has led the RMB exchange rate to depreciate and break the expectation of the one-way appreciation of the market, it has created the real demand for avoiding the risk of the renminbi, and has also brought business opportunities to the RMB products that really have the function of avoiding risks.

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< p > today, the spot exchange rate of RMB opened at 6.2258, which was 5 basis points lower than the 6.2253 on the previous trading day. After the opening, the RMB exchange rate continued to rise yesterday, breaking through the 6.22 pass to 6.2191 in the intraday, setting a new high of nearly three weeks.

After the afternoon trading, the exchange rate had a callback. After that, the exchange rate was in a slight concussion.

However, near the end of the session, the RMB exchange rate was rapidly devalued to 6.2385, and the intraday amplitude was 194 basis points.

Eventually closed at 6.2343, ending the rally.

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In May 5th and May 6th, the RMB exchange rate rose to two days against the US dollar, with a cumulative appreciation of 342 basis points and a cumulative increase of 0.5% within two days.

This is also the biggest rebound in the renminbi since the last month and a half. In March 24th, the yuan rose 362 basis points on a single day, the biggest rebound in the rapid devaluation of the renminbi.

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< p > traders have indicated that under the action of all market factors, the strength of buyers and sellers is changing faster, and the trend of two-way fluctuations is still in the same direction. What is worth noting is that the overall market is cautious and the trend is not clear.

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< p > Cao Yang, part of the financial market of Pudong Development Bank, said that the purpose of exchange rate reform is to achieve two-way volatility and unilateral trend is not sustainable.

Compared with the emerging market currencies, the renminbi in the fourth quarter of last year saw a sharp decline in the value of emerging market currencies, and the renminbi was strong against the trend.

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