As the mid-term elections in the United States officially begin, some peculiar market phenomena may require our attention. What market phenomenon? A basket of currencies in the U.S. dollar index such as the euro, Japanese yen, and British pound rose neatly, which correspondingly caused the U.S. dollar index to fall for three consecutive days and has reached the key point of 109. This round of U.S. dollar index surged as high as 114.78. Is this adjustment normal? Everyone knows that there are 6 currencies in the U.S. dollar index, and they are all appreciating against the U.S. dollar at the same time. Is there any abnormality in this?
The US dollar is the most important settlement currency in the international energy market. Therefore, from a historical perspective, international energy prices such as oil usually form a negative correlation with the trend of the US dollar index, that is, the US dollar index rises, and international crude oil prices fall, or vice versa. But now the situation has changed. War factors have led to insufficient supply of global fossil energy, and rigid rise factors have been embedded in energy prices. Therefore, the negative correlation between the US dollar index and oil prices has also been broken.
There are only two ways for countries, especially the countries in the euro area, to lower oil prices: first, lower their own currency values and push up the U.S. dollar index, trying to lower energy prices through the appreciation of the U.S. dollar and the drop in oil prices; international purchasing power to hedge against rising oil prices. Now, the first method can no longer be counted on, and the rise of the US dollar index cannot depress oil prices, and the more the local currency depreciates, the higher the price of imported oil, and the higher the domestic prices.
Recently, the hegemony of the United States has become more vivid. On the one hand, it wants to use the Russia-Ukraine conflict to completely destroy Europe's cheap energy supply, thereby crushing European manufacturing companies and forcing them to invest and set up factories in the United States; Produced products are subsidized while imports are excluded.
At this juncture, a basket of currencies in the U.S. dollar index showed signs of collective riots. What is even more abnormal is that in the early morning of November 9, Beijing time, the U.S. dollar index fell by 0.7%, but the prices of New York crude oil futures and London Brent crude oil futures not only did not rise, but fell by 2.83%.
From this, what we should see is: the world today, especially those developed economies, may have to rely on continuous and substantial interest rate hikes to boost their currencies and lower energy prices.
If this is the case, is it an "opportunity in crisis" that China can seize? At least we have seen that no matter what the growth rate of foreign trade is, China's current account surplus has not decreased, and it can even continue to maintain a "double surplus" pattern. necessary condition.
It is generally believed that the depreciation of the local currency is conducive to exports. But historically, the biggest hope of traders is not the depreciation of the local currency, let alone the ups and downs, but the relative stability of the exchange rate. It may be more conducive to China's economic growth to stabilize the RMB exchange rate in a more comfortable range for foreign trade. We would like to appeal once again: at a time when the international situation is changing rapidly, China's financial management department may increase the intensity of exchange rate management to make it more conducive to the simultaneous improvement of the quantity and quality of China's economy.
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