Powell "scared" not only US stocks, but also non US currencies

8month29On Monday, the US dollar index moves towards110Moving forward, the RMB/USD index has fallen below again after two years6.9。 Last Friday, Powell's speech at the annual meeting of global central banks exceeded expectations, causing a sharp drop in US stocks and a surge in the US dollar index.

according toforeign exchangeThe trading center announced that the central parity rate of the Chinese yuan against the US dollar was lowered on Monday212Base points, after opening, both onshore and offshore RMB fell below6.90Da Guan. Wang Youxin, a senior researcher at the Bank of China Research Institute, analyzed that during the global central bank meeting, Federal Reserve Chairman Powell's stance on future monetary policy was more hawkish, which also prompted a rapid upward trend in the global foreign exchange market, including the US dollar index. So it has also brought downward pressure to other non US currencies around the world, including the RMB exchange rate.

Wang Youxin, a senior researcher at the Bank of China Research Institute, believes that the recent decline in the RMB exchange rate is mainly influenced by three factors. Firstly, due to factors such as the Federal Reserve's continued interest rate hike and the weak euro, the external US dollar index has continued to rise, bringing adjustment pressure to the RMB exchange rate. Secondly, the central bank has recently lowered the mid-term lending convenience and loan market quotation rates respectively(LPR)The continuous differentiation of monetary policy trends between China and the United States has caused certain disturbances to short-term cross-border capital flows and exchange rates. Thirdly, some cities in China have experienced repeated outbreaks of the epidemic recently, with insufficient investment and consumption willingness from enterprises and residential sectors. The real estate industry is recovering slowly, and the growth rate of social financing is slowing down. These factors have to some extent increased exchange rate volatility.

NanhuafuturesAccording to the research report, considering the prospects of domestic and foreign economic policies, there is no further pressure for significant depreciation in the future. Given that the US dollar index is approaching a high point and the Chinese yuan is also heading towards6.90Possible, but broken7It is still a small probability event.

In the Seoul foreign exchange market, The exchange rate between Korean won and US dollar on Monday is1342.5The Korean won opened and fell to1350.8Korean won, then slightly rebounded to1350Below Korean won level. This is from2009year4month29Day (the lowest intraday value is1357.5Since the Korean won, the exchange rate between the Korean won and the US dollar has fallen for the first time1350Gateway.

The South Korean foreign exchange department immediately intervened verbally in the foreign exchange market, but failed to effectively prevent the decline of the Korean won. On the same day, the first Vice Minister of Planning and Finance of South Korea, Fang Jishan, held a meeting and stated that he will implement policies to stabilize the foreign exchange market and timely respond to the trend of "one-sided" market trends.

The Japanese yen has recently fallen below the US dollar139At the gateway, we have achieved even greater success24New low in recent years. Excluding the impact of tax hikes, Japan's inflation rate is at its highest level in decades, which already puts a heavy burden on them. However, it is expected that the Bank of Japan will not take immediate action; Haruhiko Kuroda explicitly denied last month the possibility of changing policies to prevent the yen from falling. Last month, he stated that preventing the yen from falling would require the Bank of Japan to significantly raise interest rates, which would seriously damage the slowly recovering economy.

Last Friday, after Federal Reserve Chairman Powell hinted that interest rates would remain high for a longer period of time to curb soaring inflation, the US dollar surged against a basket of currencies on Monday20Annual high point. The strengthening of the US dollar has pushed other major currencies to new lows and put pressure on emerging market currencies.

Powell said,9The monthly interest rate hike will depend on the overall economic data and constantly changing prospects at that time, although7monthCPIandPCEMultiple consumer inflation indicators such as6The moon is falling, still hovering around40Annual high and far above2%The goal of. He also pointed out that,7The monthly inflation data has improved, but it is not enough to change the policy path of the Federal Reserve's insistence on raising interest rates, as it has not yet reachedFOMCThe level that needs to be seen before being convinced that 'inflation is declining'. Currently, the market expects that9At the next Federal Reserve meeting in the month, raise interest rates75The probability of a basis point is approximately64.5%。

Regarding the strength of the US dollar, Huatai Securities Research Report believes that,2021Since the second half of, the business cycle has entered the downward channel, the real economy has weakened, investors' risk appetite has decreased, and the capital return to the mature market has pushed the US dollar up in stages. The current round of business cycle may bottom out in the first quarter of next year. Combined with the filtering results of the exchange rate of the US dollar against major currencies, the US dollar is still in the upward channel in the second half of this year, and the peak building range may start in the first quarter of next year.

CICC stated that the Federal Reserve still has a long way to go in fighting inflation and advised investors not to overly expect a return to loose US currency. There is a recent view in the market that as the downward pressure on the US economy increases, the Federal Reserve will slow down interest rate hikes and begin cutting rates at some point next year. We believe that this idea may be immature, and standing in the present, we should not have too many extravagant hopes of reducing interest rates. stay7monthFOMCAfter the meeting, Powell made it clear that he would not be affected by a certain quarterGDPNegative growth means abandoning monetary tightening. In his speech at the central bank's annual meeting, he once again hinted that the Federal Reserve will not easily let go until inflation has significantly fallen. In addition, Powell also mentioned that6Monthly Dot Matrix Expected to2023At the end of the year, the federal funds rate will be slightly lower than4%The level of. Given this, we expect the Federal Reserve to continue raising interest rates to2023Year.