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Money Wars Inspire Commodities

2010/10/14 22:27:00 44

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currency

The topic of war and commodity bull market is the focus of attention in the financial investment market.

The minutes of the FED policy meeting announced in September 21st showed that many participants thought the Fed should further introduce loose monetary policy if the unemployment rate was too high or the price was too low.

From June 7th to October 13th this year, the US dollar index has fallen by about 13%, and the US dollar index has fallen by nearly 77. It has fallen to a low of 74.17 in November 26th last year. It may even fall to 70.698 in the financial crisis period, which was set up on March 2008 17.

The recent collapse of the US dollar has triggered a fierce international currency war, and all countries have adopted unilateral monetary action to cope with the pressure of the depreciation of the US dollar and the appreciation of the local currency.

Governments and central banks such as Japan, South Korea, Brazil and Thailand have taken measures in recent years to avoid further appreciation of their currencies.

Among them, the Bank of Japan restarted zero interest rate policy in October 5th and has intervened many times in the foreign exchange market recently.

Japan's finance minister, Yoshihiko Noda, reiterated on Tuesday that the government will take decisive action, including intervention in the foreign exchange market, to curb the yen's rise when necessary.

The government of Thailand announced on the 12 day that it would levy a 15% withholding tax on capital gains and interest income on foreign investment bonds, a move aimed at restraining the excessive appreciation of the baht.

The US Treasury's exchange rate report will be released in October 15th. The Obama administration is again facing the decision whether to announce China's first choice as a currency manipulator.

China and the United States continue to escalate their disputes over the exchange rate, accelerate the pace of RMB appreciation, and increase the pressure of appreciation.

In October 13th, the median price of the US dollar / RMB intermediate price was 6.6693, which was 82 basis points higher than the previous trading day, and the new low since 2005.

The report released by the State Administration of foreign exchange on 12 th stressed that the RMB exchange rate reform is not equal to the appreciation of the renminbi, and will continue to maintain a high pressure against the "hot money" movement.

Zhou Xiaochuan, governor of the central bank, said recently that China's current inflation rate is still rising and that its appreciation can only be gradual, and that China will not raise interest rates this year.

The central bank announced on the 13 day that the new RMB loan in September was 595 billion 500 million yuan, and the broad currency (M2) increased 19% from the end of 9 to 69 trillion and 640 billion yuan in the end of 9.

The situation of domestic monetary easing is very obvious.

Market participants generally believe that the Federal Reserve will announce a decision to re introduce quantitative easing at the from November 2nd to 3rd meeting, which is expected to further lower the US dollar.

The currency war, the depreciation of the US dollar, and the new round of ultra loose monetary policy are triggering.

market

For future inflation concerns, market funds are flowing into the stock market and commodity markets to seek refuge and increase value.

Meanwhile, a new round of more stringent real estate control measures recently launched in China, while suppressing investment and speculation in real estate, has poured a large amount of funds into the stock and futures markets, pushing up the price of stock index and commodity futures.

The Wenhua commodity index, representing the overall trend of the 20 commodity futures in China, hit a new high of 189.30 since August 2008, and the CRB index also set a 298.59 higher rebound since October 15, 2008, on the 13 day of October.

We believe that the currency war and the depreciation of the dollar will continue.

bull market

Far from over, at least for the second half of next year, the Daniel market, which has been around since the end of 2008, may be no less than the market level from 2001 to 2008.

Unless the economies of major developed economies such as Europe, the United States, Japan and other major developed economies have recovered significantly and employment has improved significantly, the currency war can be really alleviated or suspended. The US dollar will rebound again and drive a new round of adjustment of commodities, otherwise it will be difficult to change the pace of commodity bull market.