RMB exchange rate: USD/JPY back above 162
[Market Recap] On the previous trading day, the US dollar rose broadly against the Chinese yuan. The onshore yuan closed at 6.7925 against the dollar at 16:30, down 121 basis points from the prior session, and ended the overnight session at 6.7924. The central parity rate for the yuan was set at 6.8066, 19 basis points weaker than the previous day. The dollar index was flat at 100.87.
[Market News]
1. A British institution reported that the U.S. escorted 70 vessels through the Strait of Hormuz over three days, though traffic volumes remain far below pre-U.S.-Iran tensions levels. Industry sources note that insurance premiums for the strait are still about 20 times the normal level.
2. Israel announced it will maintain an 'indefinite' military presence in three key security zones: Lebanon, the Gaza Strip, and Syria. Netanyahu is set to travel to the U.S. for talks with Trump.
3. Trump stated that resolving the Russia-Ukraine conflict would happen 'much faster than people think,' adding that Putin has a 'very strong' desire to end the conflict.
4. The U.S. ISM Services PMI for June dipped to 54, marking the 24th consecutive month of expansion. Hiring activity unexpectedly improved, and cost pressures fell to a four-month low.
5. Federal Reserve Governors Waller and Warsh offered contrasting views: forward guidance remains 'valuable' and will continue to play a role, but must be applied flexibly.
[Nanhua Perspective]
As the USD/JPY exchange rate rebounds to 162, the dollar index has also shown relative intraday strength. Attention should now focus on the approaching window for potential yen intervention. Japan may adopt a surprise-style, small-scale, and sustained intervention approach. Given the relatively crowded short positions in yen, this could trigger a rapid unwinding of carry-trade flows, leading to intraday volatility in the dollar index. Regarding the yuan, domestic inflation data is due soon, and the overall pace of domestic demand recovery warrants close monitoring. Overall, the new orders index indicates that exports remain relatively robust, which will serve as a key pillar supporting further yuan appreciation.
Author: Nan Hua Research Institute, Pan Xiang (Registration No. Z0021448)
Important Disclaimer: The content and opinions in this article are for learning and reference purposes only and do not constitute any investment advice. The market carries risks, and investments should be made with caution.
![[Market Recap] In the previous trading session, the US dollar strengthened against the Chinese yuan. Onshore yuan closed at 6.7925 against the dollar at 16:30, down 121 basis points from the prior session, and ended the overnight session at 6.7924. The central parity rate for the yuan against the dollar was set at 6.8066, 19 basis points weaker than the previous day. The dollar index held steady at 100.87. [Market News] 1. A UK-based institution reported that the US escorted 70 vessels through the Strait of Hormuz over three days; traffic volume remains far below pre-US-Iran tensions levels. Industry sources noted marine insurance premiums for the strait are still 20 times the normal level. 2. Israel announced it will maintain an 'indefinite' military presence in three security zones in Lebanon, the Gaza Strip, and Syria. Netanyahu is set to visit the US for talks with Trump. 3. Trump stated resolving the Russia-Ukraine conflict would happen 'much faster than people think,' adding that Putin has a 'very strong' desire to end the conflict. 4. The US ISM Services PMI for June dipped to 54, marking 24 consecutive months of expansion. Hiring activity unexpectedly improved, and cost pressures eased to a four-month low. 5. Federal Reserve Governors Waller and Worshe offered contrasting views: forward guidance remains 'valuable' and will continue to play a role, but must be applied flexibly. [Nanhua Perspective] As the USD/JPY exchange rate rebounds to 162, the dollar index has also shown relative intraday strength. Attention should now focus on the approaching window for potential yen intervention. Japan may adopt a surprise-style, small-scale, and sustained intervention approach. Given the relatively crowded short positions in yen, this could trigger a rapid unwinding of carry-trade flows, leading to intraday volatility in the dollar index.](https://nnqimage.futunn.com/sns_client_feed/29709840/20260707/web-1783402730878-G5CKVk33RY.png/big?area=1&is_public=true&imageMogr2/ignore-error/1/format/webp)
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