From the analysis of historical data, the trend of RMB and A shares is highly correlated in most cases. Every time the RMB depreciates, it is accompanied by the decline of A shares, or even a sharp dive. The reason is that, on the one hand, the depreciation of RMB leads to the decline in the valuation of local currency assets, which leads to the weakening of financial, real estate and other related sectors, thus dragging down the overall market; On the other hand, once the expectation of RMB depreciation is formed, it will lead to the outflow of hot money and the liquidity environment in which A shares are located will be tightened rapidly. If this phenomenon of hot money outflow continues, and the A-share market is currently in the bubble stage, then the space for the stock market to fall will continue to expand.

The impact of RMB depreciation on housing prices: the downward pressure on housing prices will shrink the assets of homeowners.

There are many reasons for the soaring housing prices in China in the past decade, one of which is the appreciation of RMB, which attracted a lot of domestic and foreign funds to push up the real estate bubble. The purpose of investors from all walks of life is not only to earn the exchange difference of RMB appreciation, but also to earn the income of RMB-denominated assets appreciation. Now that the RMB exchange rate has depreciated, a lot of hot money will sell assets denominated in RMB, and maintaining and pushing up housing prices requires a lot of liquidity accumulation. As far as the current liquidity is concerned, house prices are facing downward pressure, at least it is unlikely that house prices will continue to rise.