Some companies suffered a huge loss of 30 million! The exchange rate returned to the 6.4 era, and sellers cried!

For cross-border sellers, now is the era of the most opportunities, but also the worst. The opportunities come from the huge changes in global market demand, so that hot-selling products can continue to emerge like mushrooms after rain.

The bad thing is that opportunities are accompanied by huge risks, and it is impossible to predict where you will fail.

Yesterday, the RMB exchange rate opened the curtain of the new year with a sharp rise. On the first trading day of 2021, the onshore RMB exchange rate against the US dollar rose by more than 800 points during the day, reaching an intraday high of 6.4579;

The offshore RMB exchange rate against the US dollar rose by more than 500 points, reaching an intraday high of 6.4417 . As of 16:30, the onshore and offshore RMB exchange rates against the US dollar were 6.4612 and 6.4437, respectively, both hitting new highs since June 2018.

Why has the RMB appreciated so rapidly? Experts said that this round of RMB appreciation is due to the continued growth of the Chinese economy and the continued depreciation of the US dollar index.

Looking back at 2020, the RMB exchange rate showed a trend of first depreciating and then appreciating. From January to May, affected by the impact of the epidemic, the RMB exchange rate fluctuated and depreciated, and once depreciated to around 7.17 in May. However, as the COVID-19 epidemic in China was fully controlled at the end of May, the economy fully recovered, and the RMB regained its upward trend. From May 28, 2020 to date, the RMB has risen by 9.34%, with a rebound of more than 7,000 points.

A simple calculation shows that if a resident wants to exchange 100,000 US dollars, he needs 719,000 RMB. Today, the minimum is only 648,000 RMB, a difference of nearly 70,000 RMB. In other words, if someone exchanged 100,000 US dollars six months ago and held it until now, and then exchanged it back to RMB, he would have lost nearly 70,000 RMB.

This is really tough for sellers doing foreign trade exports!

Many foreign trade companies are particularly worried: if the RMB exchange rate continues to rise, coupled with the pressure of rising raw material prices and sea freight rates, the operating pressure of companies will increase significantly.

So what will be the trend of the RMB exchange rate in 2021?

Zhu Haibin, chief economist of JPMorgan Chase China, believes that this round of RMB appreciation is driven by China's economic fundamentals, and it is expected that the RMB will continue to maintain a strong trend in 2021, at least until the first half of this year. By the end of 2021, the RMB exchange rate against the US dollar will rise to around 6.25 yuan.

Therefore, according to the opinions of professionals, if the seller has a large amount of funds in the account, he can withdraw the funds first to avoid further fluctuations in the RMB exchange rate.