The dollar "outshines others" by raising interest rates.
1. USD: The Federal Reserve's sharp interest rate hike and accelerated contraction pushed the US dollar to strengthen.
On September 22nd, the US dollar index officially broke through the11mark, hitting a new high since 2002. The dollar index rose by 15.5% compared with the beginning of the year. Ye Yanwu believes that the upward trend of the US dollar index does not seem to be over at present under the background of the strong interest rate hike and accelerated contraction by the Federal Reserve.
According to him, on the one hand, the strength of the US dollar in September is closely related to the money supply and credit collection brought about by the strong interest rate hike of the Federal Reserve. Since the beginning of this year, the Federal Reserve has raised interest rates five times, with a cumulative increase of 350 basis points, which is unprecedented. At the same time, the interest rate forecast for 2022-2024 is further improved, from 3.4%, 3.8% and 3.4% to 4.4%, 4.6% and 3.9% respectively, which will effectively support the rise of the US dollar index.
On the other hand, the Fed's contraction progress in September improved significantly, which will accelerate the tightening of market liquidity and support the rise of US bond yields. The Federal Reserve shrank by $56.3 billion in September. "Although this figure is still lower than the planned $95 billion, it is still considerable compared with the scale of $63.6 billion from June to August. Tightening market liquidity will support the high operation of the US dollar index. " Wu Ye mentioned.
2. Euro: The energy crisis aggravated inflationary pressure, and the European Central Bank lagged behind in raising interest rates.
Since 20021,1 1, the inflation rate in the euro zone has been rising rapidly and continuously due to the tight supply chain and other factors. The Ukrainian crisis that broke out in February this year led to a decrease in energy supply and a continuous increase in energy prices, which aggravated the upward trend of inflation. Although the European Central Bank (ECB) keeps raising interest rates to curb inflation, its decision to raise interest rates lags behind that of the Federal Reserve, which is the most fundamental reason for the pressure on the euro. Since the beginning of the year, the euro has depreciated 17.43% against the US dollar, once falling to around 0.98.
3. Pound: Inflationary pressure and insufficient interest rate hike are important reasons for the depreciation of the pound.
In Ye Yanwu's view, the fundamental reason for the depreciation of the pound against the US dollar is the high inflation expectation in the UK and the lack of motivation for the Bank of England to raise interest rates. Although the Bank of England can choose to raise interest rates to curb inflation, a rapid increase in interest rates will further hit the already trapped consumption and bring greater challenges to the decreasing investment. Therefore, although the Bank of England acted in advance and raised interest rates by 165 basis points since 65438+February last year, the rate of interest rate increase was still slower than that of the Federal Reserve. The risk of investing in Britain has increased, and it is impossible to continue to attract a large amount of funds to support the pound, which has put pressure on the pound.
"One operation", inflationary pressure as always.
In fact, in the face of rising inflation, in order to curb further inflation, many central banks around the world began to actively intervene as soon as possible.
The attitude of Fed officials has become more and more "eagle" since September. Especially according to Ye Yanwu, Federal Reserve Chairman Paul repeatedly stressed in his speech in September that he would continue to raise interest rates until they were adjusted to a "strict enough" level. After the FOMC meeting in September, the benchmark interest rate was raised again by 75 basis points to the range of 3.00%-3.25%, and the market's interest rate forecast for 2022-2024 was further raised, from 3.4%, 3.8% and 3.4% to 4.4%, 4.6% and 3.9% respectively. The trend of strengthening the US dollar may continue to strengthen, and the US dollar
At the same time, the progress of the Fed's downsizing in September improved significantly. The size of the Federal Reserve shrank to $56.3 billion in September, compared with $63.6 billion in June-August. The tightening of market liquidity makes the yield of US bonds continue to expand, with the yield of 2-year US bonds rising to 4.272%, the yield of 10-year US bonds rising to 3.829%, and the inversion degree of the yield curve of US bonds deepened.
The European Central Bank has raised interest rates by 1.25 basis points in the past two meetings, and the policy makers of the European Central Bank have indicated that it may be necessary to raise interest rates by 75 basis points again in the meeting of 1 and to raise interest rates to neutral interest rates again in February of 1. It is estimated that the deposit interest rate of the European Central Bank is currently 0.75%, which will rise to 2% by the end of this year and around 3% next spring. It is predicted that by 2024, inflation will remain above the ECB's 2% target, and even longer-term expectations will be higher than the target. As a result, bond yields in the euro zone generally rose. The yield of euro zone benchmark 10-year German government bonds rose to 2. 1 14%, and the yield of 2-year German government bonds rose to 1.762%, much higher than the deposit interest rate, which was 0.75% of the European Central Bank.
The Bank of England raised interest rates from 65438+ last February, much earlier than the European Central Bank and the Federal Reserve. On September 22nd, the Bank of England announced that it would raise interest rates by 50 basis points to 2.25% in an attempt to curb inflation. This is the seventh rate hike announced by the Bank of England this year and the biggest rate hike since 1995. At present, the yield of 10-year British government bonds is 4. 123%, and the yield of 2-year British government bonds is 4.278%, which is close to the yield of US government bonds. It is estimated that the Bank of England may raise interest rates by 1 1 by 50 basis points to 3.75% before the end of1,so as to catch up with the Fed's interest rate hike and save the decline of the pound against the US dollar.
However, after the "one-stop operation" of central banks, the role of raising interest rates in alleviating inflationary pressure is very limited.
The data shows that the CPI in the UK dropped slightly to 9.9% in August, with the expected value of 10.2% and the previous value of10.65,438+0%. In August, the CPI in the United States and Europe rose slightly. The published CPI of the euro zone in August was 9. 1%, higher than the expected 9%, and the previous value was 8.9%. In August, the CPI of the United States was 6.3%, which was 6. 1% higher than expected, and the previous value was 5.9%. Energy expenditure and housing-related expenditure are the main contributions of CPI, and it is difficult for CPI to drop significantly in the short term. The September CPI data released by the euro zone on September 30 also shows that inflation will be a long-term problem, and the effect of simply raising interest rates may be limited. The published CPI of the euro zone in September was 10%, higher than the expected 9.7%, and the previous value was 9. 1%.
Under high inflation, the depreciation of non-American currencies is inevitable.
In fact, under the background that the Federal Reserve, the European Central Bank and the Bank of England are trying their best to curb inflation, further tightening of monetary policy is inevitable. Wu Ye believes that the ECB's interest rate hike will depend on inflation. "The European Central Bank will continue to raise interest rates to prevent high inflation from affecting economic behavior and becoming a long-term problem, which is also emphasized by the statement of European Central Bank President Lagarde." He mentioned that Lagarde said in his speech on September 20th that "the European Central Bank needs to continue to normalize its monetary policy and is prepared to adjust interest rates at any time as needed to achieve the medium-term inflation target of 2%".
Therefore, in the future, the CPI index of the euro zone will be the key factor affecting the ECB's interest rate hike.
The Bank of England may raise interest rates by 10/50 basis points before the end of10. Ye Yanwu explained that, on the one hand, it can alleviate the imported inflation caused by the devaluation of the pound. On the other hand, the Bank of England also needs to raise interest rates to restore market information and attract more investment into the UK to support the rebound of the pound.
In his view, in addition to raising interest rates, the Fed may further accelerate the pace of table contraction, which may be more obvious in curbing inflation. According to reports, the scale of the use of the reverse repurchase tools of the Federal Reserve has recently reached the second highest point in history, with a total scale of 2.310.6 trillion US dollars, indicating that the market is full of liquidity, and the impact of choosing to shrink the table now will not be too great.
At the same time, the current federal funds rate (EFFR) is 3.08%, which is close to the lower limit of the benchmark interest rate. "This shows that both banks and non-bank financial institutions have abundant liquidity and need to recover excess liquidity in the market by shrinking the table." Ye Yanwu mentioned that if the Fed actively sells the securities it holds, instead of passively shrinking its balance sheet through the natural maturity of bonds, it can shrink liquidity more quickly and may curb inflation more effectively.
"Overall, the upward trend of interest rates in the United States seems to be not over in the context of the strong interest rate hike and accelerated austerity by the Federal Reserve and the intensification of the European energy crisis." Ye Yanwu said that in the face of aggressive interest rate hikes, the yield of US bonds soared, which led to the widening spread between the US dollar and other currencies, and further depreciation of the exchange rate between the euro and the pound was inevitable.
Regarding the risk points that need to be paid attention to in the future, Ye Yanwu believes that there are three main aspects: First, the impact of the credit risk of the British government on the market. Recently, the British government announced a tax reduction plan, which caused investors to worry about the deepening of the British fiscal deficit, and then the pound lost confidence. Affected by this, the yield of British government bonds rose rapidly. Although after the Bank of England announced the "unlimited" temporary bond purchase, British government bonds soared across the board on September 28, and the pound rebounded briefly, if the market failure continues or worsens, it will pose a major risk to the financial stability of the UK. The Bank of England may need a more active monetary policy to hedge the government's economic stimulus plan.
Second, the European energy crisis intensified in winter. After the euro fell below parity against the US dollar, the European energy crisis was aggravated by the leakage of the "Beixi" natural gas pipeline a few days ago, and the decline was further aggravated. At the same time, with the arrival of winter, the demand for natural gas in Europe has increased, and the European energy market has become extremely fragile. "Ensuring energy supply is the primary consideration for European economies at present. As the inflationary pressure in Europe aggravated by the energy crisis is expected to be difficult to be alleviated in a short period of time, it is necessary for the European Central Bank to continue to raise interest rates. " Ye Yanwu reminded that, however, the debt problem is widespread in the euro zone countries, and an aggressive interest rate hike strategy may lead to the euro zone facing a debt crisis again. Therefore, the European Central Bank may adopt a relatively neutral interest rate hike strategy, and the interest rate hike will not be very radical.
The third is the excessive austerity brought about by interest rate hikes. As early as July, the Fed acknowledged the risk of excessive interest rate hikes for the first time. Members attending the meeting are worried that the Fed's excessive interest rate hike will lead to economic weakness, and the Federal Open Market Committee (FOMC) may tighten monetary policy beyond what is needed to restore price stability, which may further expand the upside down of long-term and short-term yields of US debt. "If the Fed changes from passive contraction to active contraction in the future, it can not only recover excess liquidity in the market, but also prevent the bond yield from rising too fast. This is another option for the Fed to control inflation. " Ye Yanwu said.
Ye Yanwu: Master of Economics, Nankai University. Currently, he is the director of Everbright Futures, the director of the research institute, and a special researcher of Everbright Group. Leading the research team to win honors such as Shanghai Financial Pioneer, Shanghai Financial System Advanced Collective and Shanghai Futures Exchange Excellent Investment and Research Team.
This article is from Futures Daily.
Related question and answer: What is the symbol of currency? The world's major currency symbols are as follows:
1, RMB: ￥
2. USD: USD
3. Euro:?
4. Brazilian real: real
5. Pounds:%
6. Singapore dollar: Singapore dollar
7. Japanese yen: Japanese yen
International currency symbol, used when there is no suitable currency symbol.
(gly) Li Yuan (common currency in Li Guoji, token 100 Cent = 1 Li Yuan).
The origin of currency symbols in various countries;
1, "RMB" is the symbol of RMB.
1 955 March1day, when the People's Bank of China issued the second set of RMB, it officially confirmed the currency symbol of RMB for the first time. Because the unit of RMB is Yuan, and the Chinese pinyin of Yuan is yuán, the currency symbol of RMB adopts the initial capital "Y" of Yuan. In order to avoid misunderstanding and misprinting with "Y" and Arabic numerals, a horizontal line is added to the word "Y", and the pronunciation is still "Yuan".
2. "$" is the symbol of dollar as currency.
The origin of "$" can be traced back to the beginning of16th century, when Spain minted a silver dollar called "peso". This silver dollar pattern has a crown and a royal badge (lion and castle) on one side and two pillars on the other. According to western mythology, they are the pillars of Hercules, representing the peaks on both sides of Gibraltar's Xia Hui.
According to legend, Europe and Africa were linked together a long time ago, and were later pulled apart by Hercules. 1732, Mexico city used a machine to cast a "double-column silver dollar", which was similar in shape to "PKSO". It's just that the patterns of the eastern and western hemispheres are added between the two columns, and each column has a pattern curled into the shape of "$ $". After a long time, people took "$" as a symbol of silver dollar. Today, many countries in the world adopt "$" as their national currency symbol.
3. The currency symbol of Euro is "?"
There is no officially recommended symbol for the euro, and its amount is generally expressed as a decimal of the euro (such as commonly used? 0.05 instead of 5? Or 5c). The lowercase letter c is also commonly used, which comes from the Dutch guilder. In Ireland, you can usually see the lowercase c (just like on stamps), but sometimes you use the penny symbol in the shop? .
Greece widely uses its primitive monetary unit lepton (λ ε π τ? -Abbreviation of capital letter lambda (λ), which is also used in the design of euro coins issued by Greece. Germany usually uses the abbreviation "ct" to mean "minute". Finland generally uses decimal form, such as -.82? But sometimes you can see the abbreviation "snt" of Finnish "sentti", such as 50 snt.