The strong US dollar pushes the renminbi down to test 6.95, the yen weakens, and Hong Kong exchange shops exchange 750 million in a single day

Risk aversion continues to rise, with the US dollar index breaking through the 100 mark on Friday for the first time since November last year, and rising for four consecutive days, reaching a high of 100.54. The offshore renminbi was reported at 6.8783 against 1 US dollar; the yen fell to its lowest level against the dollar since July 2024, with 1 US dollar approaching the 160 mark at 159.75, and every 100 yen dropping to as low as 4.8918 Hong Kong dollars. Analysts expect the US dollar index to remain strong above 100 in the short term, while the yen is likely to hover between 156 and 160, with a high chance of intervention by the Bank of Japan at the 160 level. Currency Exchange Store Yen Exchange Amount 750 Million Due to rising oil prices and heightened inflation concerns, the yen is further under pressure. Japanese Finance Minister Satsuki Katayama stated that Japan is prepared to take all necessary measures to address the impact of yen exchange rate fluctuations on people's lives and added that they are in close contact with the US government regarding foreign exchange issues. The weakness of the yen has also boosted business at currency exchange stores, with a manager at a small exchange store revealing that the yen exchange amount reached 750 million yesterday, a slight increase of 5% from the previous day. Related Articles: Yen Exchange Rate | Yen Falls to 4.9, Over 1.5-Year Low - A Look at the Latest Exchange Rates for Currency Exchange Stores + Banks + Credit Cards Lin Junhong, head of the research department at the business division of Shangshang Financial, indicated that the US dollar index is expected to remain strong above 100 in the short term, while the yen against the US dollar is estimated to hover between 156 and 160 due to the negative factors of oil prices, fiscal deficits, and the difficulty of achieving interest rate hikes. However, there is a high chance of intervention by the Bank of Japan at the 160 level. He believes that the strong trend of the renminbi remains unchanged, but under the strength of the US dollar, it may test 6.95 against 1 US dollar in the short term, although it is still expected to rise above 6.8 by the end of the year. If the renminbi tests 6.95 from the current level of about 6.9, the appreciation would be about 0.7%, suggesting that every 100 Hong Kong dollars would exchange for 87.6 renminbi at that time. Market Expects Fed to Delay Rate Cuts The impact of rising oil prices has led several major banks to predict that the Federal Reserve will not be able to take rate cut actions earlier. The FedWatch tool from the Chicago Mercantile Exchange indicates that the market believes there is a 98.1% probability that the Federal Reserve will maintain interest rates in March, with only a 40.3% chance of a 0.25 basis point rate cut by December, slightly higher than the probability of maintaining rates in that month (39.1%). US President Trump again pressured yesterday, calling for Fed Chairman Powell to cut rates immediately, stating on social media, "The Fed Chairman is 'too late,' where is Powell today? He should cut rates right away, not wait for the next meeting!" Lin Junhong: Rising Inflation Increases Rate Hike Space Lin Junhong stated that the strengthening of the US dollar is due to the seeming difficulty of a short-term ceasefire in the Middle East conflict, and high oil prices may push up inflation. The rapid rise in US Treasury yields is due to many central banks estimating potential rate hikes in their countries. Although the US still has a chance to cut rates, the space for rate hikes has correspondingly increased. He noted that the two-year US Treasury yield has reached 3.7%, indicating that the market expects the US may raise rates, although this has not yet been reflected in interest rate futures The U.S. core PCE price index in January increased by 3.1% year-on-year, the highest level since March 2024, in line with market expectations, with the previous value showing a growth of 3.0%; the month-on-month growth was 0.4%, matching expectations and the previous value