The Relationship Between Exchange Rate And Stock Market Is Not So Simple.

Exchange rate and stock market are not simply or negatively related.

(1) the direct relationship between exchange rate and stock market is unstable because these two variables are dependent variables, and the independent variables are monetary liquidity and economic growth.

When currency is loose and economic growth is stable, the depreciation of exchange rate can be called active depreciation. When the economy is trapped and the fundamentals deteriorate, the depreciation of exchange rate can be called passive.

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(2) when the market depreciates, the stock market rises.

After the outbreak of the US subprime crisis, the US dollar fell by 15%, and the S & P increased by 71%. QE

By the end of 12, Japan implemented "Andouble economics", the Japanese yen depreciated more than 60% against the US dollar, and the Nikkei 225 increased by 130%.

(3) when the market depreciates passively, the stock market falls.

Affected by the US subprime crisis, South Korea's fundamentals have deteriorated significantly. The Korean won has depreciated by 43% and the South Korea composite index has fallen by 40%.

Brent crude oil prices plummeted in July of 14. The fall in oil prices led to a significant depreciation of Russian rouble and a 40% plunge in the stock market.

More vigilance is the potential risks of emerging market countries.

(1) the angle of exchange rate is more vigilant. It is the risk of partial crisis.

Several financial crises caused by emerging market countries in the past, such as 97 years' Thailand, 98 years' Russia and 02 years' Argentina, will have an impact on the global capital market.

In the 10 years, 4-7 months and 11 years, 7-10 years and two times, the Greek debt crisis broke out, and the global stock index fell synchronously. If there is no euro zone bailout for Greece, the consequences will be even more serious.

(2) measure the burden of external debt and guard against risks in Ukraine, Kazakhstan, Australia and Canada.

Foreign debt / foreign exchange reserve and foreign debt /GDP ratio are important indicators to measure the size of potential crises. At present, Ukraine, Kazakhstan, Australia and Canada have higher foreign debt / foreign exchange reserves and /GDP.

The resource related industries are the main industries of Ukraine, Kazakhstan, Australia and Canada. In the future, we need to be vigilant that the Federal Reserve raising interest rates will cause the price of oil, metals and other resource goods to fall. These countries will have a heavier debt burden and may explode risks.

The active depreciation should not be overemphasized.

(1) the devaluation of RMB devaluation in the 14 years is an active depreciation. The background of devaluation is loose monetary policy. Monetary easing and other policies have hedged the downward pressure of economic growth, so on the whole, the stock market is rising.

(2) after the depreciation of the 811 exchange rate, the stock market plummeted.

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811 the central parity of RMB continued to decline for three days. A shares did not drop immediately, or even slightly increased.

The real decline of A shares began in August 18th, when the currencies of many emerging market countries followed the devaluation, and the greater the magnitude, the continued depreciation of the renminbi increased the market's expectation of raising interest rates by the Federal Reserve, and global investors worried about the recurrence of the crisis.

(3) the devaluation is smaller and more controllable.

In early 16, the exchange rate depreciation rate of emerging market countries was not large, only South Africa and Argentina were more than 5%.

In addition, the RMB exchange rate, regulators have begun to intervene in the RMB exchange rate, the recent two days the RMB Offshore and offshore exchange rate has picked up.

Risk warning: overseas financial market volatility, economic growth stall, policy regulation and control market than expected.