After falling sharply for more than a month before, the EXCHANGE rate of RMB against US dollar temporarily entered a stable zone, and there were even some bright spots of strong rebound in individual trading days. At present, it has recovered 6.7 level, and two-way fluctuations around 6.66. Comprehensive internal and external factors, the sharp fall of the RMB exchange rate is expected to temporarily come to an end.

The RMB is recent rally against the dollar has been largely driven by the weakness of the DOLLAR index, which is measured by the strength of the overnight close versus the daytime close. When the DOLLAR index is in a weakening phase, the yuan tends to appreciate more at the close of the night than at the close of the day.

The high dollar index fell, mainly because the market worries about the deterioration of the us economic fundamentals in the second half of the year, and the Federal Reserve may be aggressive interest rate tightening, which also triggered the US stock market resonance, the US stock market has suffered a heavy fall recently. Looking ahead, while the Normalisation of Fed monetary policy will help sustain the dollar's strength, the basis for further significant dollar index gains is weakening given the "high fever" of US inflation and the consequent downward pressure on the economy.

In view of China's domestic economic performance, despite many challenges in the current market environment, a new batch of policies for steady and incremental growth are also being implemented. With the resumption of work and production in Shanghai and other places, the pain points of the economic cycle are also easing. Domestic economic recovery will provide the most solid support for the stability of THE RMB exchange rate.

Despite a sharp fall in the renminbi against the dollar in April, cross-border capital flows remained net, with the trade surplus in goods rising to a high of $51.1bn. The increase in the settlement of foreign exchange by market players on rallies indicates that with the increasing flexibility of RMB exchange rate, market players will actively adjust their asset and liability structure by "settlement of foreign exchange on rallies and purchase of foreign exchange on dips". This in itself will play a certain hedging role in the continuous unilateral adjustment of the exchange rate, which is the performance of the foreign exchange market becoming increasingly mature, and also indicates that the resilience of China's foreign exchange market to adapt to changes in the external environment is further enhanced.

After the rapid depreciation of the renminbi against the dollar, market sentiment has been released to a large extent. Although the current economic situation is still complex and severe, it is difficult for the RMB exchange rate to continue to rebound in the short term, but considering the current internal and external environment, the sharp fall of the RMB exchange rate is expected to come to an end temporarily. In the next stage, China's export and other economic recovery and cross-border capital flows will still be key factors affecting RMB exchange rate fluctuations. The market should treat short-term exchange rate fluctuations with a normal mind. For enterprises, compared with predicting the direction of exchange rate fluctuations, firmly establishing the neutral concept of exchange rate risk and scientifically using financial instruments to manage exchange rate risk are the fundamental ways to deal with two-way exchange rate fluctuations.