Changes in the exchange rate of RMB against the US dollar

After the last Federal Reserve interest rate meeting of the year released a dovish signal, the U.S. dollar index fell sharply, and non-U.S. currencies, including the renminbi, strengthened.

On December 14, after the Federal Reserve’s interest rate decision was released, the offshore RMB exchange rate against the US dollar rose above the 7.14 mark, an increase of more than 600 points.

At 2 a.m. Beijing time on December 14, the Federal Reserve released an interest rate resolution that showed that the target range for the federal funds rate will remain unchanged at 5.25%-5.5%, which remains at the highest point in 22 years, in line with market expectations. However, as the dot plot, economic forecasts and Federal Reserve Chairman Powell's speech generally conveyed dovish signals, the market expected that this round of Fed interest rate hikes may have ended. The U.S. dollar index fell from above 104 to below 103, with the lowest falling to 102.7417 on December 14.

The dot plot shows that this cycle of interest rate hikes may have come to an end, and also suggests that interest rates may be cut three times next year.

Powell said at the press conference: “While we believe that policy rates are likely to be at or near the peak of this tightening cycle, economic conditions since the epidemic have surprised forecasters in many ways, and we cannot guarantee that we will achieve 2%. "Continued progress on our inflation target." Powell said the Fed was prepared to tighten policy further if appropriate.