On 28 October, the People's Bank of China authorised the China Foreign Exchange Trading Centre to release data showing that the yuan's mid-price was quoted at 7.1307, down 217 points. Experts generally believe that the dollar higher is driven by the yuan against the dollar exchange rate passive depreciation of the important reasons. wind data show that the dollar index since October 14 rose to 103.1953, so far are maintained at 103 above the level.

China Minsheng Bank chief economist Wen Bin said, by the year the Federal Reserve to cut interest rates again is expected to influence, superimposed on the European Central Bank in October as expected to cut interest rates, ‘Trump deal’ rise and other factors, the dollar index continued to strengthen to 103 above the pressure of the yuan weakened, the onshore and offshore exchange rate adjusted to 7.10 yuan near.
‘The yuan exchange rate is mainly determined by the market, in the market-based formation mechanism, the yuan has risen and depreciated, two-way fluctuations is the norm. The spot exchange rate of the RMB against the US dollar has depreciated slightly by 0.3 per cent overall since the beginning of this year, and there have been a certain range of falls and rises in some periods, but they are all in line with the changes in the internal and external environments.’ Li Hongyan, deputy director of the State Administration of Foreign Exchange (SAFE), said at a previous press conference at the State Council Information Office that compared with other currencies, the performance of the yuan in the global foreign exchange market is relatively robust. Since the beginning of this year, the dollar index rose 2.3 per cent, the euro and the yen depreciated against the dollar by 1.7 per cent and 5.9 per cent, respectively, and the emerging market currency index fell by 6.3 per cent, so the fluctuation of the yuan is both normal and moderate.

Looking forward to the subsequent trend, Wang Youxin, a senior researcher at the Bank of China Research Institute, believes that the RMB exchange rate in the fourth quarter is expected to show range fluctuations, which means that the exchange rate will not rise or fall unilaterally, but fluctuate within a certain range. From the positive side, the recently announced many incremental policies will gradually take effect, the policy dividend will accelerate the release of the domestic economic fundamentals will continue to improve, which will provide strong support for the RMB exchange rate. However, the slowdown in the pace of interest rate cuts by the Federal Reserve and the uncertainty of economic and trade policies after the U.S. election may have a certain impact on the foreign exchange market. On balance, the exchange rate shows a higher probability of range fluctuations.

Some macro analysts believe that in the short term, the trend of the U.S. dollar and the domestic package of incremental policies introduced by the rhythm and scale, is still the dominant factor affecting the RMB exchange rate. Currently in the early stage of the Fed's interest rate cut cycle, the probability of the dollar index to continue to sharply upward less, while the domestic package of incremental policies will continue to be released, the fourth quarter economic growth will have a significant rebound. Therefore, the next yuan sustained significant downside is unlikely, relative to other non-U.S. currencies will also be in a strong operating trend.