The renminbi sounded the clarion call.
In recent days, the RMB exchange rate against the US dollar has continued to strengthen, and the offshore RMB exchange rate against the US dollar has risen above 7 for the first time in half a year10, the highest rise of more than 200 points in the day, the highest report of 79075。
In the long run, at the beginning of November this year, the offshore yuan was quoted at 7 against the US dollar3415, in just one month, the offshore RMB has accumulated more than 2,000 points against the US dollar, with an appreciation of more than 28%, according to this trend, the RMB exchange rate is just around the corner to break 7.
In this regard, some people say that the main reason is that on December 14, the Federal Reserve announced a pause in interest rate hikes for the third time this year and continued to maintain the federal ** interest rate at 525% to 5The dot plot of 50%, which has attracted much attention in the market, also shows that the Fed has turned from hawk to dove and will start a cycle of interest rate cuts next year.
But is the question really that simple?
Any currency is anchored to assets, and behind the RMB exchange rate is China's economy and Chinese assets.
This means that whether the RMB exchange rate can be the best depends largely on whether China's economy is optimistic and whether the value of China's assets is high or low.
With the continuous development of the steady growth policy, the domestic macroeconomy stabilized and rebounded after the third quarter, and the internal depreciation pressure of the RMB in the early stage was significantly eased.
But the key problem is that recently, foreign countries and research institutions do not seem to be so optimistic about China's economy, and even on the contrary, they are declining.
For example, not long ago, the international rating agency Moody's downgraded the outlook of China's sovereign rating, and at the same time downgraded the rating outlook of more than 100 state-owned units or put them on the watch list, which is obviously not optimistic about China's economy.
In addition, although foreign institutions have raised China's GDP growth in 2023, the increase is not large, not more than 05%, and the economy is not so optimistic for next year, with Goldman Sachs' GDP growth rate of only 46%。
In other words, although we firmly believe that China's economy is stable and improving, judging from the actions of foreign countries and research institutions, the positive information does not seem to be enough to support the sharp rise in the RMB exchange rate.
So now the key question is, where does the confidence in this wave of rapid appreciation of the RMB come from?
Let's look at the impact of the Fed's pause in interest rate hikes on the RMB exchange rate.
This is understandable, since the Federal Reserve began to raise interest rates violently in March last year, the dollar has continued to strengthen, and other currencies are under pressure, including the yuan.
In particular, in order to stimulate the domestic economy, we have not raised interest rates synchronously with the United States, and are in a relatively low interest rate state, and a relatively large interest rate gap has been formed between China and the United States, which has also formed a foundation for the RMB.
The reason is very simple, for example, if you are an investor, the interest rate in China is 2%, the interest rate in the United States is 5%, you don't need to take any technical operations, and you don't need to know any inside information, as long as you exchange RMB for US dollars, you can enjoy a 3% interest rate differential, and there is also an accompanying exchange rate difference, what will you do?
Of course, it is to exchange the yuan for the dollar, and put the money in the United States to eat interest, and this has led to the fact that the dollar in the currency market has become more sought-after, and the subsequent appreciation of the dollar and the depreciation of the yuan have become.
Now, the Fed's interest rate hike cycle is over, and there is news that interest rates will be cut in 2024, and the interest rate differential between China and the United States is about to narrow, so the rise in the RMB exchange rate is of course reasonable, and the RMB will naturally become more valuable in the short term.
Here's what I'm going to say, thoughIn addition to the pause in interest rate hikes by the US dollar and the signal from the Federal Reserve, there is a more hidden and important factor in the appreciation of the yuan.
As you may know, in the past, the United States mainly relied on dollar hegemony to harvest the world, that is, by creating a "dollar tide" to cut interest rates to create bubbles, raise interest rates to pull down the value of assets in emerging economies, and then cut interest rates to take cheap dollars** to complete the harvest.
And in the case that the dollar interest rate cut has become the general trend, the tail of Wall Street capital has been exposed-The market expects US dollar capital to enter the Chinese market, and is hoarding RMB to build momentum in advance.
For example, on December 14, the northbound funds were 505 on the same day2.6 billion yuan, sold 4706.3 billion yuan, net **346.3 billion yuan.
On December 15, although the northbound funds were in a state of net outflow, the net ** on that day was as high as 1,034, with a turnover of 1,151600 million yuan, more like a relatively large-scale adjustment.
More importantly, the direction of these foreign capital investments is not necessarily **, other financial markets, industries, and even real estate may have dollar capital.
In the final analysis, the most fundamental purpose of these international capitals coming to China is because they are optimistic about China's economy, especially in the current economic downturn, and high-quality assets are generally low.
Therefore, a large amount of international capital has entered China, and the RMB foreign exchange market is the starting point of everything, and the increase in the exchange rate is naturally reasonable.
Write at the end:
In fact, every time the Fed starts a cycle of interest rate cuts, there is a massive influx of dollar capital into China.
The reason is simple, China is one of the most promising economies in the world, and it is not an exaggeration to say that investing in China is investing in the future.
But there are two sides to everything, and although these dollar capital come to China, although it will bring a lot of money, it will also push up inflation and create a lot of asset bubbles.
And this requires us to improve ourselves even better, and when the shock wave comes, we will be more comfortable with it.
Kunpeng Project