The RMB exchange rate has fallen below the key level of 7.2, and may continue to move south in the short term.

　　The RMB exchange rate has fallen below the critical level of 7.2 without any signs of intervention, and analysts expect it to continue to decline in the short term.

　　As of the time of publication, the US dollar rose 0.3% against the offshore RMB exchange rate to 7.2007, the highest level since November. In the past three months, the US dollar has risen by 4% against the Chinese yuan.

　　Earlier in the day, the People's Bank of China (PBoC) set the reference exchange rate for the Chinese yuan at 7.1795, the lowest level since November 29th.

　　Under the green light of the People's Bank of China, the RMB depreciated to a critical 7.2 level_ By Bloomberg

　　Christopher Wang, strategist of OCBC Bank, said: "After being disappointed that the expected China (CHN) stimulus plan has not been released, the resistance of offshore RMB is 7.2150. One time worth looking forward is the semi annual economic meeting of the Political Bureau in July, when a major stimulus may be announced, but if not, it means that the RMB will plummet."

　　Fiona Lin, a senior foreign exchange strategist at Maybank Securities, said: "Jerome Powell, the chairman of the Federal Reserve, may make more hawkish remarks, which may stimulate the re pricing of hawkish policy prospects and further push up the dollar." She was referring to the fact that Paul will go to Capitol Hill to give testimony later in the day.

　　Willer Chen, a senior research analyst at Forsyth Barr Asia, said: "The selling is just a continuation of the weak mood, because the hope of the stimulus plan has been temporarily dashed. The holiday effect may also be part of the reason behind the weakness." He referred to the shortened trading time this week due to the Dragon Boat Festival holiday.

　　Some people believe that more specific non monetary stimulus measures will only be introduced at or after the Politburo meeting in July. If that's the case, as we enter a period of capital outflows caused by Chinese company dividend payments, foreign exchange policies may need to introduce some measures to curb volatility, "said Joey Zhou, head of Asian foreign exchange research at HSBC Holdings