Hong Kong stock market is a real-time scoreboard for the Renminbi and US Dollar.

Shanghai Lujiazui Finance & Trade Zone Development and Wash: A Parallel Dialogue on Currency Confidence On June 17-18, 2026, the financial decision-makers of China and the United States, rarely found themselves simultaneously in the spotlight. In Shanghai, on the banks of the Huangpu River, the Shanghai Lujiazui Finance & Trade Zone Development Forum opened, with Pan Gongsheng, Wu Qing, and Ding Xiangqun all taking the stage, releasing a dense stream of policy signals. In Washington, at the Federal Reserve Building, Kevin Wash took the stage at a press conference, making his first public appearance as the 17th Chairman. Two meetings, ten thousand kilometers apart, yet pointing to the same question: in this era of interest rate differentiation, the rise of AI, and the reshaping of the monetary system, where will the financial systems of each country head? The market speaks first - two completely different days In the Chinese market: policies ignite technology, index internally fragmented On June 17, A-shares opened lower, with the market expecting a correction - the technology sector had been accumulating profits for two consecutive days, coupled with risk aversion on the eve of the Federal Reserve's first show. However, policy signals from the Shanghai Lujiazui Finance & Trade Zone Development Forum began to land at noon, and the market turned sharply upwards. At the close of the day: the Shanghai Composite Index rose by 0.40%, the Shenzhen Component Index rose by 1.31%, the ChiNext Index rose by 1.56%, and the Sci-Tech Innovation 50 surged by 4.69% in a single day, leading the market. But behind this figure is an extremely fragmented market - over 3700 stocks fell across the board, with less than three percent rising. Rising are core technology assets such as storage chips, PCBs, and semiconductor equipment; falling are traditional heavyweight sectors such as coal, banks, and liquor. Bonds and the RMB exchange rate remained stable in the offshore market. In summary, the state of the Chinese market that day can be described as follows: policies catalyzed technology confidence, but the internal structural fragmentation of the stock market exposed deep aversion to non-technology assets. In the US market: Wash speaks, all stocks fall In the early hours of the same day (June 18 Beijing time), Wash's press conference ended, and the market quickly made a judgment - this was a more hawkish debut than expected. The three major U.S. indexes fell across the board at the close: the Nasdaq fell by 1.34%, the S&P 500 fell by 1.21%, and the Dow fell by 0.98%, with the Dow falling by over 500 points in a single day. Meta fell more than 5%, SpaceX fell nearly 5% for the first time after going public, and Nvidia, Microsoft, and Amazon all followed suit. Short-term U.S. bond yields rose rapidly, the US dollar index surged, and gold fell. The market's understanding is that the Federal Reserve will reduce its market reassurance and return pricing power to data and fundamentals. In summary, the state of the US market that day can be described as follows: Wash's shortest statement of 130 words created an unexpected hawkish impact, and the market responded with a decline. On the same night, the Chinese and US markets headed in two different directions - Chinese technology stocks rose, while the US Nasdaq fell (overall semiconductor stocks rose). Chinese bonds remained stable, while US bond yields surged. The RMB was stable but slightly stronger, and the US dollar rose rapidly. On the surface, it was a rise and fall, but the logic behind it is what truly deserves a deeper read. The market's response is the result, and the communication style of the policy is the reason. To understand this rise and fall, one must first understand what the decision-makers on both sides are saying and how they are saying it. How should central banks communicate - two completely opposite communication philosophies This edition of the Shanghai Lujiazui Finance & Trade Zone Development Forum was exceptionally high-profile. Pan Gongsheng announced: the timely addition of overnight reverse repurchase tools, narrowing the interest rate corridor to 50bp, creating offshore central bank repurchase tools, and studying the establishment of non-bank liquidity support tools. Wu Qing announced: expanding the fifth set of standards for the sci-tech innovation board to AI large models, supporting unprofitable companies such as KNOWLEDGE ATLAS and MiniMax to return to A-share listings, launching active ETFs, and supporting Hong Kong-listed companies to list domestically. Ding Xiangqun announced: supporting new financial businesses to lead the way in Shanghai. This dense, forward-looking, and specific statement is a significant change in the policy communication of Chinese financial regulators in recent years. Compared to previous editions of the Shanghai Lujiazui Finance & Trade Zone Development Forum, policy signals have become more precise, forward-looking guidance clearer, and released synchronously during market trading hours - this is an active move to manage expectations and counter market volatility with certainty. In Washington, Wash did the exact opposite. He reduced the statement text from 340 words to 130 words, the shortest regular policy statement since 2007. He announced the abandonment of forward guidance and did not submit a dot plot forecast. His reason was straightforward: "Providing a dot plot is of no help to implement policy, and the FOMC does not consider itself bound by interest rate forecasts." The implication of this statement is that for over a decade, the market has been accustomed to treating the dot plot as a commitment to the interest rate path for pricing. This "excessive communication" has made Federal Reserve policy inflexible and every market shakeup has in turn pressured policy. Wash wants to break this cycle. China is establishing stronger policy expectation management capabilities, making the market believe that signals from regulators are reliable and consistent; the Federal Reserve is actively withdrawing these signals, allowing the market to return to autonomous judgment on economic fundamentals. Opposite directions, each with its own logic - China's capital market is at a critical stage of rebuilding confidence and needs certainty to stabilize expectations; the US capital market, on the other hand, has lost its ability to independently price assets due to its overreliance on the "Fed Put" (Fed market rescue). But one thing needs to be made clear: in the long run, Wash's direction is correct - a central bank that communicates excessively will ultimately lose its independence; but the short-term cost is the systematic increase in market volatility, which was the direct cause of the sudden drop last night. The cost of reducing signal supply is that the market will have a more pronounced reaction to every piece of data. This is the cost that Wash has chosen to accept, and the market needs time to adapt. AI, asking different questions AI is the underlying theme of this edition of the Shanghai Lujiazui Finance & Trade Zone Development Forum and Wash's debut, but they are asking different questions. The Shanghai Lujiazui Finance & Trade Zone Development Forum is asking: How can AI companies obtain capital support? Wash is asking: Will AI change the fundamental assumptions of monetary policy? There is a hidden connection between these two questions that needs to be pointed out: if Wash's theory of AI deflation is correct, the profitability inflection point for AI companies will arrive faster than the market expects - this means that the timing is right to open the capital market channel to unprofitable AI companies now. The industrial perspective of Chinese regulation and the macro perspective of the Federal Reserve both point to the same conclusion at this point. Two currencies, two paths RMB: Expanding usage scenarios, seeking balance This edition of the Shanghai Lujiazui Finance & Trade Zone Development Forum pushed forward on the issue of RMB internationalization: six banks were approved for pilot offshore RMB foreign exchange trading; the creation of offshore central bank repurchase tools; Hong Kong recently launched 5-year RMB sovereign bond futures on the exchange; and the signing of the "Action Plan for Development of Offshore Finance in Shanghai International Financial Center" on the same day. RMB internationalization is taking a pragmatic path: not eager to replace the US dollar, but gradually expanding actual usage scenarios through trade settlement, investment and financing needs, and capital market connectivity, while gradually opening up while maintaining control over the capital account. USD: Behind currency discipline, there is deeper support Wash's hawkish debut caused the USD to soar overnight. But one thing needs to be understood: the strengthening of the USD is not only the result of hawkish policies and high interest rates but also comes from the global attractiveness of US technology assets. Global capital chasing the dividends of the US AI industry flows into US stocks, which are then dominated by USD-denominated assets. One variable to watch is that if the US-Iran conflict is substantially eased in the near future, a significant amount of accumulated safe haven USD positions will face pressure to close. This judgment is based on the premise of a substantial easing of US-Iran tensions and continued decline in oil prices - this is a risk scenario, not a benchmark scenario, but if it happens, a rise above 6.7 for the RMB, or even a challenge to 6.6, is possible. Hong Kong stocks, an overlooked currency battleground This is a question that no one is willing to directly address, but it may be one of the most important issues that Chinese financial decision-makers need to face seriously. Over the past three years, the US Nasdaq index has repeatedly hit new highs driven by the AI wave, declaring to the world one thing: the best AI companies globally are in the US, and the most valuable technology assets are in US stocks. This is not a slogan, but a market judgment made every day through prices. Capital is without nationality, and where it flows depends on where the best assets are. The global capital inflow into US stocks is a declaration in action: I choose USD-denominated assets. The performance of the Hong Kong stock market this year conveys a worrying signal in the opposite direction. The majority of Hong Kong stocks are denominated in Hong Kong dollars (which are essentially USD), but they are mainly Chinese companies and RMB-denominated assets. Therefore, the valuation of Hong Kong stocks is essentially the pricing of Chinese assets by global capital. When Hong Kong stocks are undervalued for an extended period, the Hong Kong tech sector is weaker than the Nasdaq, and top AI companies are absent from the Hong Kong Stock Exchange, this is no longer just a market cycle issue but a signal that Chinese assets are temporarily lagging behind in the global competition. Looking at it from a different angle, Hong Kong stocks can be seen as a reflection of the competition between USD and RMB assets. If Hong Kong continues to struggle to attract top global AI companies in the long run, institutional funds will continue to stay in the Nasdaq, narrowing the flow of global capital into RMB-denominated assets. Therefore, supporting AI companies to list in Hong Kong and enhancing the pricing capabilities of Hong Kong stocks is not just a capital market issue, but also a matter of confidence in the RMB. If top Chinese AI companies can achieve high-quality listings in Hong Kong by the end of the year, it will be an important signal for the restoration of confidence in RMB assets; otherwise, the gap on this "scoreboard" of Hong Kong stocks will continue to widen. This point, viewed from the perspective of currency competition, deserves a higher political priority. One thing is certain: in today's competition unfolding simultaneously on the three fronts of AI, interest rates, and currency, every policy expression is quietly redefining the flow boundaries of global capital. The performance of Hong Kong stocks is the real-time scoreboard of this competition. This article is reprinted from "Wall Street News"; author: Chen Lichen; GMTEight Editor: Chen Xiaoyi.