A Brief Analysis of the Impact of the Dollar Index and Interest Rate Spread on the RMB Exchange Rate

The change of USDCNY has drawn wide attention both in China and abroad. Since the implementation of the new exchange rate reform on August 11, 2015, the RMB exchange rate became further market-oriented. At the same time, the "811" exchange reform clearly revealed the quoted price quotation of the RMB exchange rate middle price, which made the RMB exchange rate forecast more accurate and valuable.Therefore, this article analyzes the spot exchange rate,the USDCNY, from two aspects of the dollar DXY index and the short-term interest rate spread, and further analyzes and forecasts the future fluctuation of RMB exchange rate. The results shows that the RMB would decrease when the dollar index increases, and that RMB would increase when the spread between China and the USA expands. Finally, this paper believes that the downward pressure on the RMB is high, and the probability of breaking the previous high spot of 6.50 yuan / dollar is relatively small, through the model prediction and correlation analysis.