Euro falls to 10-year low against RMB

The euro has dropped to its lowest point against the RMB in a decade to 7.7746 on July 10, after the exchange rate first plunged below 7.8 on July 9, according to the reference rate provided by the State Administration of Foreign Exchange.

The euro has been facing downward pressure this year due to the ongoing eurozone crisis. On May 23, the euro dropped below the critical level of 8 against the RMB for the first time in a decade on the worsening crisis of the Spanish banking system.

The euro was below 7.9 on May 30 against the RMB, but the rate was lifted above 8 again after the Greek election eased tensions in the market.

However, the easing measures adopted by European central banks at the beginning of July, including the interest rate cut by the European Central Bank and quantitative easing by the Bank of England have again dampened the confidence in the market.

Last week marked the largest decline of euro since Sept 2011, with the exchange rate against the US dollar decreasing by 3 percent.

The expected earnings of domestic euro financing products have also slid to 2.45 percent in May, 0.79 percentage points lower than in January.

Ye Jianxiong, HSBC Asia-Pacific region director of wealth strategies, said the euro will face more downward pressure as sovereign debt issues worsen, and that the Greek election would only defer the problem.

Meanwhile, a survey by JP Morgan Chase Co of senior management in US corporations showed that the exchange rate of euro against the US dollar is expected to rebound to 1.28 in 2013 from the current 1.22.