I never expected that at a time when the world's major assets were plummeting, the RMB was standing alone. Last night, the Dow fell 1.51%, the S&P 500 fell 1.84%, the Nasdaq fell 2.43%, and the European markets in the United Kingdom, France, and Germany all plummeted. In addition to the stock market, gold and silver also fell to varying degrees.
However, in such an environment, the onshore yuan rose by more than 450 basis points against the US dollar on August 2, and successively rose above the 7.24, 7.23, 7.22, 7.21, and 7.20 mark. At present, the renminbi has returned to a new high since the beginning of the year.
So why is this happening? On the surface, the first is the unsatisfactory economic data for July released by the United States. United States number of initial jobless claims reached 249,000 last week, a new high in nearly a year, indicating that the United States job market is not ideal.
At the same time, the ISM manufacturing index in the United States was 46.8%, significantly lower than market expectations. Persistently high interest rates in the United States have caused big problems in their own real economy. At the same time, these data are showing that United States a new recession cycle is coming.
The second United Kingdom officially confirmed a rate cut, with the Bank of England, the central bank of the United Kingdom, announcing a 25 basis point rate cut on August 1, cutting the benchmark interest rate from 5.25% to 5%. What does the United Kingdom rate cut mean? It means that the United States interest rate cut is also coming soon.
The United States interest rate cut means that all dollar assets will weaken. For these two reasons, most of the world's dollar-linked assets are falling.
The decline of the US dollar also indirectly contributed to the strengthening of the yuan. Of course, this round of RMB strength is also a bit strange. It's definitely not that simple.
You should know that the interest rate differential between China and the United States is currently as high as 4%. Now that even domestic government bonds with yields of more than 2% are being robbed, one can imagine how many funds are trying to find ways to run to the United States to earn higher interest. In this case, there should be more funds to exchange the renminbi for the dollar.
However, the actual situation has turned into a rapid rebound of the renminbi, which can be said to be very strange. If it is only because the dollar has fallen, it does not seem to be enough to pull the yuan so sharply. So why did the renminbi rise so much? It is estimated that someone is deliberately pushing up the yuan. Previously, we had been doing everything possible to protect the exchange rate of the RMB. So is our adversary helping us now?
It's certainly impossible to help us. We need to understand the concept that whether the renminbi rises or falls sharply, it is not good for China's economy. In the past, we did not blindly raise the RMB exchange rate, but did not let the RMB exchange rate plummet in the short term, but maintained it in a relatively stable state.
In other words, our opponents raised interest rates and wanted to completely suppress our exchange rate. However, we have more than 3 trillion US dollars in foreign exchange, and we will take as many dollars as they smash at it. So the dollar rate hike to more than 5%, many currencies can't, but the yuan is still very strong.
This creates a situation that after the dollar blows up many countries, we can also follow the United States to pick up the cheap. United States, of course, is quite unhappy.
Since it can't lower our exchange rate, this old United States has now changed its thinking and started to raise our exchange rate. Don't think he's helping us by inflating our exchange rate.
What is the current state of the economy? That is, real estate is no longer good, and real estate sales and land auctions in the first half of the year are basically cold. Our economy is domestic demand and exports, and real estate is the largest domestic demand. Now that real estate is not working, it will be difficult for domestic demand to pull up. Now our economy is basically supported by exports.
If the exchange rate goes up, it's a huge blow to my exports. If the renminbi continues to appreciate, then our exports will definitely fall. So at this time, the United States is deliberately inflating our exchange rate to hit our exports.
It can be said that United States move is really powerful, and it directly hits our vital point. Next, it is estimated that we will find a way to stabilize the exchange rate as soon as possible, otherwise our exports are estimated to fall sharply.
You must know that Europe and the United States are already adding tariffs to us. If our exchange rate is not controlled, exports will be severely hit, which will seriously affect our economy.