AMZ123 Cross-border NewsletterAMZ123 learned that on July 10, the central parity rate of the yuan against the US dollar was reported at 6.7989, up 47 basis points from the previous trading day. This is the first time since 2023 that it has broken through the key 6.80 level, hitting the highest since February 10, 2023. Meanwhile, the yuan became the only Asian currency to receive bullish bets in this round of surveys, showing an independent strengthening trend.
The current yuan appreciation is mainly driven by three factors: resilient exports, a high and volatile US dollar, and improved market sentiment. Data shows that dollar-denominated exports grew by 15.5% year-on-year from January to May, and the upgrading of high-value-added product structures further strengthened fundamental support.
Institutions expect that the yuan exchange rate will generally maintain a stable to slightly stronger trend in the second half of the year, with short-term movement towards the 6.75-6.70 range and two-way fluctuations within the 6.70-6.90 range.
In the face of profit pressure on exports and reduced import costs due to yuan appreciation, export companies can reserve a 2% to 3% exchange rate buffer in pricing and shorten the validity period of long-term order quotes by 7 to 15 days. For foreign exchange settlement, they can adopt a batch approach at higher levels, targeting the 6.78–6.80 range, and avoid betting on one-sided movements. For orders with longer cycles and larger amounts, businesses can lock in 50% to 70% of foreign exchange exposure through forward forex settlement or currency options.
Importers may appropriately delay foreign exchange purchases, reduce costs through batch operations, and expand inventory based on market conditions. Integrated industrial and trade enterprises can use import and export cash flows to naturally hedge foreign currency exposure. All types of enterprises should reduce one-sided judgments, prioritize guaranteed returns, and respond to opportunities and challenges from exchange rate fluctuations through refined risk management and flexible business strategies.
Commentary from Seller Home
The continuous appreciation of the yuan directly compresses export profits. Sellers should quickly apply the combined strategy of "price adjustment + batch settlement + lock-in hedging" to hedge risks, pay attention to the stronger yuan trend in the second half of the year, and include it in cost calculations in advance.
Source: AMZ123
Original link: https://www.amz123.com/kx/En4jlXew
