The Depreciation Of RMB Has Spread To The US Financial Market.

Goldman Sachs said that as China's central bank and the Federal Reserve increasingly interact with each other, the weakening of the renminbi over the past year will lead to a significant increase in expectations for easing the Fed's stance.

In view of the relatively weak link between the real economy of China and the United States, the impact on the US financial situation is particularly striking; the US exports to China account for less than 1% of GDP in the US.

The depreciation of /2016 at the end of August 2015 and the end of 2015 led to pressure on the global stock market and tightened the financial situation in the US, prompting the fed to publish a partial dovish speech and postpone raising interest rates.

These two devaluation of the RMB, the dollar / RMB exchange rate changes are relatively small, and the tightening of the financial situation in the United States seems to be far beyond its due degree.

If the reaction in the US market continues to be so large, the Fed will be unable to make substantial retrenchment.

Facts have proved that deliberately devaluing the renminbi will backfire, leading to speculation about further devaluation, exacerbating capital outflow in China and tightening the global financial situation.

If China's central bank can convince the market that the bank is not prepared to let the yuan go sharply.

Then the market's downward adjustment in the price of the renminbi may not be more sensitive and weaken.

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The pace of adjustment is more gradual and the sensitivity of the US financial situation is lower. This will create more room for the fed to raise interest rates and depreciate the value of the renminbi against the US dollar.

Guoxin Securities and Warburg trust economists say the signs of China's economic stabilization may give the Fed more extra interest rates than expected.

The US dollar rose 0.44% to 6.4775 yuan this month.

China's exchange rate management has shifted to a basket of currencies, rather than against the US dollar, which has been more sensitive to the Fed's interest rate hike than the US dollar.

The response of the foreign exchange market to the central bank policy has shifted to a new trend.

In this new state, investors will begin to speculate which central bank will take the lead in giving up the easing policy.

We believe that significant foreign exchange trading opportunities will no longer arise from the further easing of central bank policy.

The central bank will be better off because of better data and higher inflation and give up easy politics. We believe that the next major trading opportunity will arise.

American economists are also expecting that the Fed will increase its inflation rate and increase interest rates two times during the year.

We are not saying that we will see inflation rising globally.

We just said that the central bank can not always maintain a loose monetary policy, and this year some central banks may be forced to give up the easing policy.