After four consecutive days of sharp rise last week, the RMB exchange rate rose again. On December 5th, the exchange rate of offshore RMB against the US dollar continuously rose through the 7.0 and 6.95 marks, with an intraday increase of over 700 points, the highest since the end of November. On the same day, the onshore RMB also rose sharply. The offshore and onshore RMB exchange rates against the US dollar were reported at 6.9504 and 6.9565 respectively.

There are two main reasons for RMB's rise above 7:

First, the recent favorable domestic policies have greatly enhanced the market's confidence in China's economic recovery, which has played a very good supporting role in strengthening the RMB; Second, under the expectation that the Federal Reserve will slow down the interest rate hike, the US dollar may enter a downward channel, and the corresponding RMB will appreciate. However, the real strength of the RMB exchange rate may have to wait until next year when China's economic recovery is highlighted and the Fed's interest rate hike cycle is confirmed to be over.