Following yesterday's offshore renminbi exchange rate breaking through the 7.2 threshold, it continued to surge today, rising at one point to break the 7.14 threshold. In just two trading days this week, the offshore renminbi exchange rate has appreciated by over 1,000 points, and since the beginning of November, it has appreciated by more than 2,700 points.

As for the reasons behind the rapid appreciation of the renminbi:

From a news perspective, according to reports, the continuous development of international bonds denominated in renminbi, along with the rise of offshore renminbi loan services, has allowed the renminbi to surpass the euro and become the world's second-largest trade financing currency.

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Secondly, according to website news, with the approval of the State Council, the People's Bank of China recently signed a bilateral local currency swap agreement with the Central Bank of Saudi Arabia. The swap scale is 50 billion yuan / 26 billion Saudi riyals, with the agreement valid for three years and renewable upon mutual consent. These two major positive developments have stimulated the renminbi's strength to some extent.

It is worth noting that the renminbi's strength this time is not due to a single event, but rather a series of positive factors that have laid the groundwork.

These positive factors include: regulatory authorities continuously speaking out to stabilize exchange rate expectations, the continuous introduction of counter-cyclical policies, the ongoing resolution of financial risks, the easing of geopolitical tensions between China and the US, the peak and retreat of the US dollar, the arrival of the seasonal settlement time point, and the renminbi's midpoint rate remaining at a low level, among others. It is the collective effort of these positive factors that has led to the favorable situation for the renminbi.

Historically, when the renminbi enters an appreciation cycle, it will drive the strength of renminbi assets such as A-shares and Hong Kong stocks. Since the beginning of November, the Hang Seng Technology Index in Hong Kong stocks has risen by more than 8%, leading in global stock markets, while A-shares are at the bottom globally, which is truly puzzling.

There are mainly two reasons for this: First, at the end of last year, the renminbi appreciated, and northbound capital flowed in at a rate of tens of billions per day. Foreign and domestic capital resonated to drive index growth, but in this round of renminbi appreciation, foreign capital has not flowed in, and domestic institutions are even more deeply trapped in a prisoner's dilemma, with heavyweight stocks lacking incremental funds.Secondly, since neither foreign capital nor domestic institutions are exerting force, speculative funds with a speculative style hold the pricing power, and thematic speculation is rampant. The stock markets in Europe, America, Japan, and South Korea rise in indices, while the A-share market rises in themes.

Domestic capital likes to gamble, and today's A-share market opened high and was smashed, with a dive during the trading session. As of the time of writing, the Shanghai Composite Index has risen by 0.46%, the ChiNext Index has risen by 0.25%, the Hang Seng Index has risen by 1.10%, and the Hang Seng Technology Index has risen by 1%.

However, today the Beijing Stock Exchange (North Exchange) surged, with the North Index 50 surging nearly 8%, rising nearly 30% from the bottom, which is a standard characteristic of the early stage of a bull market, with liquidity warming up first and small tickets rising.

Risk Warning:

The stock market is risky, and investment should be cautious. This article does not constitute investment advice, and readers need to think independently.