UBS: Central banks are planning to further strengthen the role of the euro and the yuan

On July 26th, the exchange rate of the onshore and offshore RMB against the US dollar soared sharply on July 25th. Both rose above the 7.21 mark during the session, and once tested the important mark of 7.2. According to a survey by UBS, central banks are planning to further strengthen the position of the euro and the RMB. In the coming year, central banks are planning to further increase their positions in the euro and the RMB. 70% of the respondents are investing or considering investing in the RMB. 26% of the respondents believe that the allocation will show a multi-polar pattern of the dollar, the euro and the RMB. Judging from the current flow of funds in the stock market, this is a more than expected event. Analysts believe that the RMB has not accumulated too much depreciation pressure in the early stage, our country's export growth resilience is still strong, the seasonal demand for foreign exchange settlement rises at the end of the year, and the prevention and resolution of risks brings about the upward risk appetite of RMB assets. If necessary, the policy of stabilizing the exchange rate may be strengthened. Coupled with the low risk of China's external debt, the US dollar interest rate cut, and the appreciation of the yen, there are still multiple positive factors supporting the short-term RMB.