The US Dollar Is Strong Enough To Weaken The Global Currency.

Considering that the Fed's rate hike is expected to increase, and the US dollar has continued to strengthen significantly after the US presidential election has been settled, it is estimated that the RMB exchange rate will continue to bear a downward pressure at the end of 2016.

Looking forward to next year, especially considering the Sino US bilateral trade game, it is expected that the RMB exchange rate will steadily decrease in 2017.

According to the China foreign exchange trading center, the spot exchange rate of RMB was 6.8861, down 43 points from the official closing price of the previous trading day, up 39 points from the closing day of the previous trading day.

In addition, according to the China foreign exchange trading center, as of 16:30 today, the RMB traded against the US dollar for $29 billion 203 million.

Reporters learned that the recent market expectations of the Federal Reserve's rate hike in December have gradually increased, and the US dollar has weakened to weaken the global currencies passively. The offshore renminbi has depreciated more than 5.7% against the US dollar since the beginning of this year. In relative terms, the renminbi appreciated against the Japanese yen and the euro. This shows that the depreciation of the renminbi is mainly due to the passive depreciation caused by the appreciation of the US dollar.

According to Goldman Sachs (Asia) limited liability company, in 2017, the potential risks faced by China's economy included the upward trend of inflation and the risk of further devaluation of RMB. Goldman Sachs initially estimated that at the end of 2017, the 1 US dollar would be about 7.30 yuan.

Goldman Sachs said the fiscal / credit stimulus policy and the RMB exchange rate.

Domestic prices have been facing upward pressure.

And then

As for the sector, the industry also talked about the depreciation of the renminbi since August 11, 2015. The reason is that the State Administration of exchange control has taken the initiative to liberalize the exchange rate. At this stage, the correlation degree between the Hang Seng Index and the RMB exchange rate fluctuation is very low, but the sectors with larger exchange rate influence in the subdivision sector still show the correlation with the exchange rate.

From the perspective of the listed companies of the local textile and garment sector, we calculate the short-term performance elasticity of RMB exchange rate depreciation of 1%.

Taking the annual report data of 2015 as a benchmark, we should not consider the factors such as order price changes, hedging, import of raw materials, and so on. We select the companies whose performance elasticity is greater than 1% due to depreciation of RMB 1% and sort them according to their elasticity from large to small.

The impact of RMB depreciation on the financial situation of listed companies includes two parts, namely, direct impact (business income, exchange gains and losses, cash flow) and indirect effects. The exchange gains and losses will be included in the financial expenditure, which directly affects the profit statement.

Therefore, overseas industries, which are relatively large and export oriented industries or listed companies, will be expected to gain greater profits in the devaluation of the RMB.

CITIC Securities analyst Xue Yuan analysis, the main impact of RMB depreciation on the performance of textile and garment sector is: in the short term, the foreign exchange earnings generated by export orders from enterprises are converted into RMB exchange earnings when compiling the reports; in the long run, the order prices may fall (depending on the bargaining power and supply and demand of both sides).

The advantages will lead to an increase in orders.

Now, with the downward pressure on China's economy, the economic fundamentals are hard to sustain the higher exchange rate.

As the International Monetary Fund announced in November 30, 2015 that the Renminbi should be included in the SDR, the Central Bank of China has further liberalized the RMB exchange rate control, and the depreciation of the RMB against the US dollar is logical.

Previously, investment banks including Goldman Sachs generally believed that the renminbi would probably depreciate to around 6.7 after the US dollar.

The depreciation of the RMB exchange rate will enhance the profitability of the textile industry and stabilize employment.

Take cotton yarn as an example, in 2014, China's exports amounted to US $2 billion 63 million.

The depreciation rate of the RMB exchange rate has reached 5%. Even under the background of static calculation, it can raise the profit margin for the industry by US $100 million.

Considering the export advantage brought about by the depreciation of the RMB, this amount will be greater.

The devaluation of the renminbi will also delay the trend of some enterprises moving to the neighboring countries.

In view of the lower labor costs of neighboring countries, including Vietnam, Pakistan and India, many garment enterprises plan or have moved their factories out.

Such a trend is obviously unfavorable for stable employment.

For more information, please pay attention to the world clothing shoes and hats net report.