The Federal Reserve cut interest rates for the first time in four years, with some institutions stating that the RMB exchange rate "may not rule out returning to the 6-handle in the short term."

The Federal Reserve officially started the interest rate cut cycle, driving the RMB to USD exchange rate to soar. The future trend and China's monetary policy space have become the focus of the market. Wang Qing, Chief Macro Analyst at Orient Securities, stated that based on the trends of US stocks, US bonds, and the USD after the interest rate cut announcement, the magnitude of this rate cut is in line with market expectations. After the Fed's rate cut, the impact on the RMB exchange rate is mainly reflected through the USD trend, which in turn depends on the pace of future rate cuts. If the Fed cuts rates at a faster pace, exceeding market expectations, the US Dollar Index may fall below 100, and the RMB to USD exchange rate will move closer to 7.0, with the possibility of temporarily returning to the 6 range. Conversely, if the rate cut pace is slower, the US Dollar Index fluctuates within limits, and the RMB to USD exchange rate will remain relatively stable. (The Paper News)