The US Dollar Rose 25% Again. How Did The Global Market Change?

Although the global financial market is bleak and gloomy, the Fed has hesitated to raise interest rates, but many people still insist on seeing more dollars, and think that the US dollar is bound to rise in the next few years.

In the next few years, the US dollar will not only rise but also rise.

Saxo strategist Pedersen said that the US dollar is reversing the short term trend of ten years, and the US dollar index will rise 25% again in the next three years.

Gore, head of fixed income at BT (construction pfer), said that interest spread trading using low cost funds to purchase higher yield currencies would be unpopular because the dollar is rising sharply.

That is to say, in the eyes of many economic analysts, in the coming years, whatever the changes in the international market, the continued rise in the US dollar is a trend.

This trend is estimated to be unstoppable for anyone.

Because this is not only because the US dollar has been in a weak state for a long time, but this situation has already been reversed. In view of the global economic development, only in the next few years will the US economy really recover.

This not only depends on the real strength of the US economy, but also depends on the economic structure of the United States, which can not be matched by other countries.

If the Fed raises interest rates, it will become an important driver of the strength of the US dollar.

From the global economic situation and future trend, the fact that the US dollar is strong is a trend.

The question now is, what will happen in the international market if the strength of the dollar really makes the us appreciate 25% again? How will the various countries and investors respond to it? Because it will change the pattern of interest in the global market.

First of all, we should pay attention to the fact that the US dollar has a completely different nature compared with other countries' currencies, that is, the current international monetary system is a monetary system dominated by the US dollar. The strength of the US dollar will not only have a huge impact on the economy of the United States itself, but also have a huge impact on the world economy and interests.

If the US dollar appreciates again by 25%, this will not only mean that the US dollar is becoming more and more valuable, but also means that the US dollar denominated asset price has risen by 25%.

In this case, this will make the world a lot.

To the United States, thereby pushing up various asset prices such as the US stock market and the housing market.

Therefore, the real estate market in the United States may also appear in the first ten years of China, and the real estate market is full of prosperity.

The US real estate boom is likely to become a major thrust of the US economy.

If the US dollar appreciates again, how much will the renminbi depreciate? There are many uncertainties in the estimation. Especially from the current economic situation in China, there are more uncertainties in the current Chinese economy.

If China's economic growth can stabilise and maintain its growth rate of 6%, the pressure of depreciation will be smaller.

Van Peterson believes that if the US dollar appreciates another 25%, then the depreciation rate of RMB may reach 7% in the next three years.

That is to say, the renminbi is smaller than other non US dollar currencies.

If the US dollar appreciates again by 25%, assuming that the dollar economy does not grow, it means that the US's economic strength has increased by 25%, and the US dollar has increased 25% of its purchasing power to non US dollar currencies.

It also means the reality of American residents.

It has increased 25%, so that products and resources from all over the world can flow to the United States to drive global economic growth.

We can see that from 2005 to 2014, the appreciation of the RMB by 35% will make the demand for the global market of China's economy grow unprecedentedly. It will not only bring unprecedented prosperity to the Chinese economy, but also lead to global economic growth.

If the US dollar appreciates again by 25%, then the price of the bulk commodities in the international market will drop by 25%, because the prices of these commodities are basically priced in US dollars, thus triggering a general decline in global prices.

Coupled with a decline of 25% in non US dollar currencies, this will also affect the decline in the price level of non US dollar currencies.

Under such circumstances, it is possible to cause global price level to go down, even to the whole world.

Towards deflation.

If the US dollar appreciates 25% and the RMB depreciates by 7%, it will be beneficial to China's economy as a whole. It will fully benefit the export of Chinese products to the United States, especially the United States is China's largest exporter.

But if the yuan depreciated by 7%, it would be possible to send large amounts of domestic capital to the United States.

If this happens, whether it will pierce the three big bubbles in the current Chinese economy is quite uncertain.

It may not be possible to pierce.

It depends on how long the RMB devaluation is 7%. It depends on whether China's economic growth will improve in the future.

In short, if the US dollar appreciates another 25%, it will have a huge impact and impact on the global market. No one can ignore this.

It also has a huge impact on China's economy.

It depends on how the Chinese government and investors respond.