Long dollar will be rise up, the trend RMB devaluation
On December 11 -- -The dollarThursday, from yesterday hit a month lows, as markets focus againThe federal reserveExpectations for higher interest rates.inThe European central bank (ECB)Before she resolution timely warning of the dollar will fall citi voice again on Thursday, said it is a good time to buy the dollar now.
The euro/ dollar tumbled 0.8%, giving up most of the 1.1% rise yesterday, yesterday, the European central bank management committee ewald nowotny speech make people have more in the future of Europe and the United States central bank policy differentiation.Investors expect the fed to tighten monetary policy, the European central bank will further relax.But before the European central bank cut interest rates on deposits by less than expected, and yet speech market increasingly worried that the European central bank may not take further action.
The yuanRecently the drop in the market by surprise.At the international monetary fund (IMF) announced the yuan in the SDR (Special Drawing Rights), offshore and onshore renminbi against the us dollar began falling.Offshore RMB against the U.S. dollar continued drop on Thursday,currencyBriefly fell below 6.5200 level, the lowest reached 6.5200.Refresh low since "revaluation" 8.11.
Due to the uncertainty of the European central bank will further easing up, but investors are still convinced that the fed will be on December 15 to 16, rising interest rates monetary policy meeting, this has propped up the dollar.
Cambridge Mercantile Group in the currency market strategy and structured products department director Karl Schamotta, says "investor confidence in the fed would act more, so the market appear skewed."
The federal funds rate movements, according to the market believes the fed to raise interest rates next week 85% of the time, the recent visit of the 18 primary dealers have 17 expect the fed to raise interest rates next week.
The Australian dollarUp more than 1% against the dollar, because Australian jobs report showed job growth strongest recorded more than 15 years.The drive from the Australian dollar yesterday hit a two-week low of $0.7169 a strong rebound.
Westpac Banking Corporation, senior currency strategist at approach said, "although some investors question the strength of the report, the report shows that Australia's economy is indeed get rid of the dependence on mining, employmentdata, as well as retail sales, GDP and a series of data showing the economy is in a stable, economy is not as many investors expected, hit by trade in goods and the performance is so bad."
The United StatesThe ministry of commerce will be released on November retail sales data, the data is expected to rebound last month.Accept foreign media survey of economists' expectations, according to the median U.S. retail sales in November month rate is expected to rise 0.3%, rise up from 0.1% last month.
As the fed stressed interest rate decision will depend on the economic data, and consumer spending accounts for some 70% of the U.S. economic output, U.S. retail
sales data are often in the past year the financial markets in the stormy waves, so called "terrorist data".
DailyFX, said this week is the fed held in MayIncreases in interest ratesInterest rates before the meeting last week, America will in this period of time from retail sales and consumer confidence data.Retail sales were flat in October, but by strong domestic demand, to boost the PMI data suggested retail data or display the recovery, economists expect retail sales rose 0.3% in November.According to the article, if the U.S. economic data show the steady, the possibility of the fed to raise interest rates to rise further, to give more upward pressure on the dollar, particularly against the euro.
Citigroup said the dollar bulls can act
The world's largest foreign exchangeTrading firmsCitigroup (Citigroup Inc) believe that distance is less than a week, the federal reserve meeting now is a good time to buy the dollar.Citigroup in New York, the group of 20 (G10) strategy Steven Englander, global head of foreign exchange in the report, said the dollar reversed, now have become attractive.
Englander, said long-term investors is thinking about how much more dollar depreciation, and based on this judge their positions and opportunity.He said: "overall, we could see in the next 12 months the dollar have a gain of close to 10%."
Currency traders in speculation expected the fed to raise interest rates next week.Although interest rates often spurred currencies to rise, but the dollar over the past year have risen 10%, stimulate large amounts of money into the benefit from the rising dollar deal.As investors focus to raise interest rates for the first time after the interest rate path, the above factors lead to the dollar in recent weeks, some consolidation.
Englander, citing citigroup, writes the data in the week ended November 24, betting on eight major currencies dollar positions had the highest level in three months.Investors in the European central bank cut long positions on December 3, resolution.Investors in the silver resolution on the day of further cuts in the dollar against the euro long positions, the biggest drop in nearly two years.
Englander, and points out that the United States and other major central Banks policy differences will support the dollar in 2016, and steps of the federal reserve to raise interest rates faster than market expectations, this positive dollar.
In fact, recent citigroup for the dollar forecast is very accurate, and timely issued the warning.Englander on November 24, issued a report warned that the dollar or the sharp correction, investors lock in long dollar profit should not wait until the fed meeting in December.Relevant documents
And shortly after citigroup warning, the dollar index if sharp correction, fell more than 3% in the short term.Today citi accident a buy order, the dollar will usher in a new round of rising?
In may this year the European monetary magazine in 2015, according to the Survey (2015) Euromoney FX Survey of foreign exchange including Deutsche Bank, Deutsche Bank, Barclays (Barclays) and UBS (UBS), European Banks over the past
year in the foreign exchange market share declines, and U.S. Banks such as Citigroup (Citigroup) is to grab more territory.
According to the closely watched industry rankings, citi is still occupied the position of the world's largest foreign exchange bank, the market share of 16.1%, slightly more than 16% a year ago.
Goldman Sachs (Goldman Sachs) the latest report also with citigroup form echo.Goldman sachs said in a report on Thursday, as the fed to raise interest rates next week approaches, the investment bank to maintain $bullish stance.
According to the report: "although the European central bank interest rate decision last week to market market, but we continue to look at more than $. To a great extent, and this is mainly based on the United StatesThe euro zoneDifferentiation policy path.The euro area and Japan is still in the loose mode, and the fed will open slow rate schedule., of course, although these expectations largely already ahead of market awareness, but it also explains why the European central bank interest rate market reacted so crazy after resolution."
In view of the above views, Goldman sachs continue to look at more than $2016 position, and adjust the euro/dollar parity expected again, while maintaining the dollar /The Japanese yen130 outlook.The bank suggest continue to do more against the euro and the yen.
The short-term fluctuations in the trend
Recently, the yuan against the dollarThe exchange rateContinuous decline.11 daily 6.4358 yuan against the dollar parity, hitting a low in four years.Deputy director general of the state administration of foreign exchange department of international paymentsdreamIn 10, the foreign exchange management policies in the fourth quarter at a news conference, said the yuan against the dollar short-term fluctuations in bilateral exchange rate trend should not be regarded as RMB devaluation, should see the yuan to a basket of currencies of multilateral exchange rate and more long-term trends.
The Chinese academy of social sciences financial researcherYi xianrong, aArticle points out, the market's reaction, this several days of RMB exchange rate lower, reason has the following several aspects:
It is November fell slightly more than expected, China's foreign exchange reserves fell to their lowest level since February 2013.
Second, the poor export more consecutive month.In market point of view, this kind of situation will increase downward pressure on China's economy, make the further pressure on the exchange rate.
Third, the IMF has just announced last week the yuan in the SDR basket, arguably, central Banks and international market investors will increase the demand for the renminbi, in the medium to make RMB appreciation of space.But in the short term, the earlier in order to guarantee the successful "into the basket," the people's bank of China has been trying to maintain the RMB exchange rate stable.But after the dust settles, short-term central bank is likely to expand the flexibility of the RMB exchange rate floating.
Four is widely expected the United States will go into a new round of interest-rate increases.Before the fed rate decision, China's central bank is trying to reduce the intervention of the market, the test after the federal reserve to raise interest rates of RMB will be under much pressure, which naturally lead to RMB devaluation in the certain degree.
Mr Yi I estimate that the yuan a persistent decline the probability of not too big, here's why:
First, after "August 11 new revaluation," the people's bank of China just for correcting deviation, RMB spot rate and the median among established price marketization and benchmark, in order to improve the RMB exchange rate formation mechanism.Although relative to other currencies, a move that led to the devaluation of the yuan range is not big, but it has caused the domestic and international market reaction.So, the affirmation of the people's bank of China will be particularly careful, don't want to see the yuan too big impact on the global market.
Second, in the current this credit currency with the dollar as the leading factor of the international monetary system, is unable to use the real price of the product in the international trade relations to measure a country's monetary relations with another country currencies, currency exchange rates between the relationship more is the result of the interest game between countries.Under this premise, political factors and other non-economic factors could become the most important considerations of RMB exchange rate of the people's bank of China border.From this perspective, the people's bank of China will not let the yuan again a new round of devaluation of the tide.
Third, the most important reason is that the people's bank of China will be reluctant to strengthen the incipient depreciation of the current market expectations.Because of the expected once formed, will not only increase the cost of the central bank to maintain the RMB exchange rate stability, but also to reverse such expectations becomes more difficult.
The current situation, China's central bank is hope to expand the RMB exchange rate flexibility, let more market factors to determine the RMB exchange rate movements.But there is more currency is determined by market
expectations.Market at home and abroad is generally believed that the RMB exchange rate overvalued and began to form a consensus.If the people's bank of China to allow the yuan to depreciate, so yuan depreciation expected to strengthen, a devaluation might open the floodgates.
If the market form the stronger yuan depreciation expectation, a lot of money will flow out of China.This will not only further strengthen the yuan's depreciation expectations, leading to more money out of China, and it may lead to China's asset prices falling, even resulting in China's financial markets in regional risk and systemic risk.These are the Chinese government is not willing to see.
Fourth, from the Angle of non-economic factors, China have been hoping that the yuan can be included in the SDR basket of currencies.Because it can speed up the internationalization of the yuan, allowing the yuan to become a recognized
international monetary market, so as to enhance China's international standing.If the yuan continue to depreciate, not only can let the meaning of the yuan in the SDR basket of currencies weakened, but also unable to let China's great-power status.So, China can make RMB exchange rate floating space elasticity increased, but you don't let the substantial depreciation of the renminbi.
In a word, the yuan is included in the SDR basket of currencies, the Chinese government hopes to expand the use of RMB on a global scale.Expand the scope of the target by stimulating to central Banks, sovereign wealth funds and private investors to store more ways of renminbi assets, in order to improve China's international standing.In the short term, therefore, the Chinese government will try to keep the RMB exchange rate stability, and won't allow the yuan to form a new value.