The war between the renminbi and the U.S. dollar has always been a hot topic in the international financial market. Since the beginning of this year, the duel between the two sides has been even more exciting, you come and go, and thrilling plots have been staged.
However, the recent scene has taken people by surprise. The renminbi, which had always been in decline, suddenly launched a fierce **, regaining the previously lost position in one fell swoop, leaving the dollar without a place to embarrass itself.
After entering November, the offshore exchange rate of RMB against the US dollar was sharply 550 points, successfully reversing the continuous depreciation trend in the previous three months. What is the reason for this breakthrough?Let's have a hard time.
01 This year's global ** situation can be described in one word: miserable.
The impact of the new crown epidemic has caused the demand of Europe and the United States and other countries to shrink sharply, resulting in the export of many Asian countries encountering an ice age and a sharp decline.
However, China has become a miracle, and in such an environment, exports have increased instead of falling. China's total exports in the first 10 months reached 1955 trillion yuan, up 04%, in sharp contrast to the sharp contraction in global exports. The contrarian growth of China's exports is a well-deserved economic miracle.
How?In fact, this is due to the fact that we have continuously adjusted our partner structure over the years. We no longer rely on the United States as a single market, but have expanded our contacts with ASEAN, the European Union, countries along the route and other regions.
At present, the United States has fallen to the position of our third-largest partner, accounting for just over 11%.
ASEAN and the EU together account for nearly 30 percent, three times that of the United States. Such a first-class structure allows us to effectively diversify risks and resist external shocks.
02 Of course, the growth of our exports has also brought us a very gratifying result: **surplus.
In the first 10 months of this year, we had a surplus of 478 trillion yuan, a record high.
What does this mean?This means that we have sufficient foreign exchange reserves that can be used to support the appreciation of the renminbi. Moreover, we can also use a part of the foreign exchange reserves to buy, increase our reserves, and improve our credit.
In fact, over the past year, the central bank's reserves have been increasing, which is also a strong support for the RMB.
03 In contrast, the dollar is depressed.
U.S. imports fell by 6 percent in the first half of this year3%, which is a staggering number. Americans, they can't even buy it!
Why is this so?There are two reasons for this: one is inflation and the other is rising interest rates.
Persistently high inflation in the United States has caused prices to skyrocket, and real purchasing power is declining despite rising incomes. At the same time, interest rates have risen sharply, making it more expensive and unaffordable for Americans to rely on credit card loans.
The double pressure of deflation and interest rate hikes has directly led to the continuous deterioration of the actual living experience of American residents and the withering of people's livelihood.
Total credit card loans in the U.S. have climbed to an all-time high1, according to the data03 trillion dollars.
At the same time, credit card interest rates have also reached the highest point in more than a decade, as high as 20%. The dual pressure of excessive credit leverage and interest rates has directly depleted the spending power of the American people, weakened the demand for imports, and thus weakened the demand for the dollar.
This reflects the shortcomings of the US economy's over-reliance on credit-driven growth.
04 To make matters worse, the outlook for the US dollar is not encouraging.
After a strong Q3**, growth in the U.S. has slowed sharply in the fourth quarter and is even at risk of recession in the first two quarters of next year.
As a result, the market expects that the Fed will likely start switching to rate cuts in the middle of next year. The downward trend of the US economy will also weaken the attractiveness of the US dollar.
As long as the Fed does not raise interest rates, the ** of the dollar has become inevitable.
Therefore, judging from the current situation, the war between the RMB and the US dollar has had an obvious trend: the RMB counterattacked and the US dollar was lonely. Although there will be fluctuations, this is already an inevitable trend in the future.
This is very good news for us.
The appreciation of the renminbi means that our purchasing power has increased, and we can buy more things with less money. This is a very big improvement in our quality of life.
Of course, we can't be blindly optimistic, we must continue to work hard to improve our export competitiveness, increase our high value-added products, expand our emerging markets, maintain our leading advantages, and lay a solid foundation for our economic development.