Pengpai News reporter Chen Yueshi
Feder After the Federal Reserve offered the largest single rate hike since November 1994, the RMB exchange rate against the US dollar rose sharply, and then part of the increase was given up.
htmlOn June 16, driven by the increase of RMB against the US dollar's mid-price by 419 basis points, the RMB against the US dollar's spot exchange rate opened above the 6.70 mark to 6.6956, with a high intraday increase to 6.6902. However, the increase of RMB against the US dollar narrowed in the afternoon, closing at 6.7162 at 16:30, up 33 basis points from the previous trading day.
At 2 a.m. Beijing time on June 16, the Federal Reserve Open Market Committee announced that it would raise the target range of the federal funds rate to 1.50%-1.75%, in line with market expectations.
At a subsequent press conference, Federal Reserve Chairman Powell said that the next meeting (convened in July) may raise interest rates by 50 basis points or 75 basis points. He said that continuous interest rate hikes will be appropriate, and the increase of 75 basis points is abnormally large. It is expected that this level of interest rate hikes will not be a normal operation.
Because the 75 basis points increase this time is within the market expectations, coupled with the market interpretation of Powell's statement, the US dollar index fell slightly, and the offshore RMB soared sharply. At the end of the Powell press conference, it rose by more than 800 points, reaching a high of 6.6685, but most of the gains were given up during the day on June 16, and as of press time, it was at the 6.72 line.
The market has different opinions on whether the US dollar index can continue to remain strong.
Pacific Securities believes that there is little room for the US dollar index to rise again. There are two main factors that dominate the US dollar index at present. One is the expectation of the Fed's rate hike in , and the other is the long-term economic prospects of the United States. Since the May meeting, although the market's expectations for interest rate hikes have increased significantly, the strengthening of the US dollar index is extremely limited, with the recent highest point rising by less than 1.5% from the May high. This is because the long-term prospects of the US economy are becoming increasingly bleak and suppressing the US dollar. The difference between this round of interest rate hike cycle is that the US economic situation is very fragile, so hikes will also significantly increase the probability of an economic recession, causing the upward trend of the US dollar to be blocked.
Haitong Securities pointed out that when inflation is high and interest rate hikes continue, the U.S. Treasury bond interest rates are likely to continue to rise. Among major economies, the U.S. economic growth is better than others, and the U.S. dollar index remains strong. The Federal Reserve's monetary policy will affect global liquidity, emerging currencies will still face depreciation pressure, and monetary policy space is limited.
In response to the impact of the Federal Reserve's continued interest rate hike on China's monetary policy , Dongguan Securities believes that for China, the Fed's series of measures to tighten its policies will to a certain extent restrict the direction and space of China's monetary policy. It is expected that China's loose policy will be implemented in the form of structural policies. As the domestic epidemic continues to improve, coupled with the coordinated efforts of monetary and fiscal policies, China's economic data showed a marginal recovery in May, and it is expected to continue its recovery trend in the future. At the same time, we must continue to pay attention to the impact of the Federal Reserve's measures on the Chinese market's capital market.
"At present, although my country has shown high independence in the liquidity level and maintains a relatively loose liquidity environment for the need to stabilize growth, under the rapid tightening of external liquidity, maintaining easing will inevitably come at a cost. Although the sharp depreciation of the Japanese yen exchange rate cannot be copied to the situation in my country, it still provides a reference. Therefore, there is limited room for further easing of my country's monetary policy." AVIC Securities pointed out.
Editor in charge: Zheng Jingxin Photo editor: Jiang Lidong
Proofreading: Luan Meng
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