The Current Economic Side Does Not Support A Significant Depreciation Of The Renminbi.

The Federal Reserve raised interest rate boots and landed in the global financial market.

After the initial shock, the market began to split up, and investors began selling off "interest free" assets and risky assets instead of holding dollars.

The US dollar remained strong against the main currencies, rising sharply to 99.35 against a basket of currencies, the dollar index, and approaching the 100 pass again.

Argentina's peso has fallen from 9.8052 to 13.9500, or more than 30%, in emerging market currencies.

However, gold prices hit the biggest one-day drop in 5 months. In the RMB market, the median price declined for ten consecutive days, but on shore and offshore prices both rose yesterday afternoon, closing up 0.03%, at 6.4815 yuan.

According to an interview with reporters, further raising interest rate hints that the US dollar will be pushed forward, and the US dollar bull market is expected to continue. The market has been included in the next two to three interest rates next year. It is possible that gold prices will be lower next year, or in the second half or below 1000 US dollars / ounce level.

CICC estimates that the yuan is currently overvalued by about 3%~8%. It is expected that more corporate debt [0.04%] and corporate debt default will occur next year, but the risk of default spread will be controllable.

State Securities said that although the Federal Reserve raised interest rate boots landing, but due to the recent China's economic data released and close to the central bank's intervention bottom line, the short-term worries of the RMB slowed down, but on the other hand, China's relatively high economic position started in 2016 and there was a downward pressure.

Li Daokui, director of the central bank's monetary policy committee and director of the China and world economic research center of Tsinghua University, publicly stated that the most direct impact of the Fed's interest rate increase on China is that it may impact the RMB exchange rate and, to a certain extent, accelerate the outflow of capital, but at the same time, it also provides opportunities for the renminbi.

"If the RMB can seize the time of international financial turbulence and maintain large-scale fluctuations in the international monetary market, it will keep the RMB reasonable.

Floating can show the real role of RMB as a new and future international currency and show heroes in troubled times.

According to the Fed's past interest rate cycles, the yen has the strongest performance in the Fed's rate hike cycle, followed by the pound and the euro.

In emerging market countries, currencies are weaker in the interest rate cycle. Analysts of Ping An Securities, combined with the trend of foreign exchange in major emerging market countries, analyzed that the trend of major countries' currencies against the US dollar was weaker than that before raising interest rates, and the overall interest rate cycle was devalued, such as Turkey, South Africa, Mexico, India and so on. G20

However, Korea's foreign exchange performance is obviously different from other emerging market countries. The Korean won has depreciated before the Fed's first increase in interest rates. It has shown appreciation after the interest rate cycle, or because Korea has been competing with the United States in the automotive, electronics and other fields.

South Korea's economic growth is more optimistic, so the won and the US dollar show a similar seesaw effect.

The US dollar hovered around a two week high against a basket of major currencies, and the yuan finally ended ten consecutive losses. Yesterday, the offshore exchange rate first rose and then closed up 0.03%, at 6.4815 yuan, and the turnover increased by 3%, at 30 billion 759 million US dollars.

However, the central parity of RMB continued ten consecutive ups and down to refresh 4 and a half years.

It is worth noting that, with the expectation of a strong fed raising interest rate, this year, emerging markets have become the most serious areas of capital selling. The currencies of emerging market currencies are most devalued. The currencies of Brazil, Turkey, Russia, South Africa, Mexico and Indonesia have an average depreciation rate of 17%.

Shao Yu, chief economist of Orient Securities, said that from the perspective of market performance, it is estimated that

Continue to strengthen, the emerging market currencies continue to depreciate, it is expected that the impact of interest rate increases on emerging markets will gradually show in the next 1~2 months.

Haitong Securities macroeconomic analyst said that the dollar weakness in the short term probability, pound, euro or rebound.

From the experience of raising interest rates for nearly three times, the US dollar index has been significantly stronger than expected before raising interest rates.

In the current round of interest rate driven expectations, the US dollar index has surged to 100 from around 80.

The high interest rate emerging currencies such as rouble and Real will be driven by short-term interest rates.

In addition, the European economy is also recovering, the market also began to expect the UK to raise interest rates, and the pound or euro will be stronger in the future.