First, why break 7?
Because the United States raises taxes on us, it is normal for the exchange rate to depreciate, which is dominated by the market price discovery mechanism, not manipulated by us. In this case, it is normal to short the RMB, and the stock market has also fallen. Originally, I scored more than 2,900 points, and now I have to take 2,800 points.
However, although it depreciated against the US dollar, the central bank said that this year the RMB strengthened against a basket of currencies, and the CFETS RMB exchange rate index appreciated by 0.3%.
Second, what will happen after breaking 7?
The central bank said that in view of the possible positive feedback behavior in the foreign exchange market, necessary and targeted measures should be taken to resolutely crack down on short-term speculation, maintain the smooth operation of the foreign exchange market and stabilize market expectations.
This means that the central bank can accept short-term depreciation, but will never tolerate large fluctuations. For example, this wave suddenly gets 8, which is completely unreasonable. People expect the central bank to manage speculators.
Third, what is the impact of breaking 7 on enterprises and residents?
For individuals, in fact, there is no other influence except investing, traveling and studying in the United States.
For enterprises, the central bank supports enterprises to buy exchange rate hedging products to avoid exchange rate risks, and should establish a "risk-neutral" financial management concept, instead of taking foreign exchange fluctuations as profit opportunities.
Fourth, what should investors do?
In the short term, this thousand-point decline of RMB will definitely affect the stock market and cause adverse effects of foreign capital outflow. Shanghai Stock Connect has flowed out for seven consecutive trading days, which shows that the impact is still great.
Today is also an outflow, so it is 7 trading days.
Therefore, in the short term, it is still to avoid risks, control positions, and choose the best. High-quality assets, priority investment index funds. Then technology stocks, and finally safe-haven agriculture and gold stocks.
In terms of positions, it is not recommended to exceed 60%, and about half a position is appropriate.
In the early morning of August 5, both offshore and onshore RMB broke 7, making it the first time since the exchange rate reform of 20 15.
Prior to this, the RMB had been hovering around 6.9 yuan for many times against the US dollar, but failed to break 7. There is a lot of discussion about whether to break 7. Now that it has broken through, what impact will it have on the market and life?
1, RMB depreciates. This shows that the foreign goods we can buy before are lower than those of 7 yuan, and we need more 7 yuan to buy them after breaking 7 yuan. In this case, if we want to buy the same amount of foreign goods, we need to spend more RMB, which shows that the RMB has depreciated relative to the US dollar.
It costs more money to devalue RMB when going abroad. If you travel abroad again, you may spend more money, because it is equivalent to the price increase of foreign consumption. Especially for families whose children are studying abroad, it may cost a lot of money. Compared with 6.3 yuan in March last year, the highest price today is 7. 1 yuan. If the annual tuition and living expenses are $50,000, it will cost an extra $40,000 in RMB.
3. It is beneficial for enterprises to export RMB. Breaking 7 is good for export enterprises, because RMB-denominated goods become cheaper. Therefore, it will promote the export of domestic goods and restrain the import of foreign goods, which is beneficial to domestic production enterprises and can hedge the tariff impact of foreign trade to a certain extent.
4. Because RMB is relatively cheap, international capital outflow will generate interest spread, foreign capital may flee, capital outflow needs to be realized, assets will be sold, and asset prices will fluctuate, which may have a certain impact on the real estate industry.
5. Prevent shorting RMB. Since the RMB often hovers around 7 yuan, there has been no breakthrough. After breaking 7 this time, as an important integer mark, it is often symbolic. International speculators may take this opportunity to short the RMB, and they may add fuel to the fire, thus affecting the stability of the RMB.
Of course, I think that RMB breaking 7 is more of a psychological impact, and the real impact still depends on the future trend. In the future, the price of RMB against the US dollar is likely to fluctuate around 7 yuan. With China's current economic aggregate and foreign exchange scale, it is impossible for RMB to fluctuate greatly, and stability is still the foundation of development.
The onshore and offshore RMB exchange rates against the US dollar quickly broke 7 after the opening on Monday, August 5, exceeding market expectations. The market reaction is both "sudden" and "finally broken", a very complicated psychology, as if the exchange rate should not break 7, but it doesn't matter if it does.
How to see the exchange rate break 7?
After the exchange rate broke 7, the central bank responded quickly, and the description of the exchange rate breaking 7 was similar:
"It should be noted that the RMB exchange rate has exceeded 7. This 7 is not an era, and it can't come back in the past, nor is it a dam. Once broken by the flood, it will plummet; It is more like the water level of a reservoir. It is higher in rainy season and will drop again in dry season. It is normal to have ups and downs. "
In fact, it doesn't matter if the exchange rate breaks 7 now, unlike before. After all, China's strength has changed, and so has its foreign trade. At the beginning of reform and opening up, 90% of our trading partners were the United States. So at that time, the RMB exchange rate was pegged to the US dollar. If the RMB depreciated against the US dollar at that time, it indicated that there was something wrong with our economy. However, it's different now. The United States is our largest trading partner, but it is not the only one. So the RMB exchange rate introduced a basket of currencies. As long as the RMB remains stable against a basket of currencies, there will be no problem. From the global market, as the parity between currencies, it is normal for the exchange rate to fluctuate. We don't have a fixed exchange rate. Why can we only appreciate against the US dollar and not depreciate against it? With fluctuations, the price mechanism can play the role of resource allocation and automatic adjustment.
Therefore, it is not surprising that the RMB exchange rate breaks 7, which is the normal fluctuation of the exchange rate.
What's the impact?
The RMB exchange rate has undergone many years of market-oriented reform. At present, market players can treat exchange rate fluctuations rationally and maturely. In addition, in recent years, they have more and more rich experience in macro-management of exchange rate, and sufficient control means can better control the abnormality of cross-border funds. Therefore, if the RMB exchange rate in Guqu.com exceeds 7, it will have little impact on the market.
However, if the market reaction is normal after this break, the space for two-way fluctuation of RMB will increase in the future, and the marketization of RMB exchange rate will reach a higher level.
What will happen in the market outlook?
Summary: It is nothing strange that the RMB exchange rate breaks 7, that is, the normal exchange rate breaks 7, and there is no basis for a sharp depreciation.
This morning, the offshore RMB fell below the 7 yuan mark against the US dollar!
On August 5th, the offshore RMB fell below the 7 yuan mark against the US dollar. Offshore RMB against the US dollar was reported at 7.0356, down nearly 600 points, and the central parity of RMB against the US dollar was reported at 6.9225, down 229 points.
The central parity of the RMB against the US dollar fell below the 6.90 mark, the first time since 65438+February last year. The median price of the previous trading day was 6.8996, the official closing price of the previous trading day was 6.94 16, and the night market closed at 6.9420. Gold has soared, and risk aversion is very serious!
Although 7 is just a number, there is not much difference between 6.99 and 7.0 1, psychologically speaking, once the RMB breaks 7, it will cause some panic. Therefore, the risk aversion was strong throughout the morning, and gold took advantage of the trend.
Why is everyone afraid that RMB will break 7? 1, the impact of exchange rate depreciation on trade.
During this period, Lauter increased a lot of tariffs on China, and at this time, the RMB depreciated again, breaking through the psychological defense line of 7, which is actually equivalent to adding insult to injury! It has aggravated the tense trade relationship between China and the United States, which the market does not want to see.
2. Global capital market volatility.
We should remember that during the China stock market crash from 2065438 to August 2005, China unexpectedly allowed the RMB to depreciate by 2%. When the stock markets of developed economies fell on Monday morning, markets around the world took it as a sign of panic among China policy makers.
Therefore, it is easy for investors to contact the weakening of the financial market when the RMB depreciates again!
3. Impact on foreign exchange reserves.
The exchange rate is usually calculated to four decimal places. Why is it so accurate? Because the exchange rate changes very little, it has a great impact on hundreds of billions of trade settlement and trillions of foreign exchange reserves, not to mention from 6.9 to 7. 1.
4. Macroeconomic impact on China.
In addition, the article in South China Morning Post pointed out that in 20 15 years, with the devaluation of RMB from 6.2 to 6.4, there was a capital outflow of US$ 500 billion in China.
If the RMB depreciates excessively, it is likely to cause signs of capital outflow again, which is not a good thing for the whole economy of China. !
My opinion:
In fact, the RMB has reached the position of 6.97 in early trading last week, so it is not much different from breaking the boundary of 7.00. A point itself is not that important. Whether it is 6.99 or 7.0 1, it has no great influence on the fundamentals of China's real economy.
But the emotional impact is definitely there, but the emotional impact is short-lived.
Therefore, when the mood affects the past, the market will still return to the normal track, so don't worry too much! As long as the renminbi is not allowed to depreciate sharply again, the problem is not big!
Since 20 15 8 1 exchange rate reform, the RMB exchange rate has experienced many sensitive moments when it is about to "break 7", but it finally stopped falling and rebounded at the 6.96 mark.
Today, the offshore RMB against the US dollar and the onshore RMB against the US dollar both broke "7" for the first time since the exchange rate reform.
From this, I feel that the central bank is still very tolerant of RMB depreciation. 7 was not allowed before, but now it is acceptable after 7. Judging from the attitude of the central bank, the RMB may be depressed in the short term.
In the long run, China, as the world's second largest economy, and the RMB as its credit currency, actually does not have the basis for substantial depreciation. Our country has sufficient foreign exchange reserves and many policy tools to combat speculation and maintain the stable operation of the exchange rate. We should have confidence in the central bank and keep the RMB exchange rate basically stable at a reasonable and balanced level.
To talk about the impact, for ordinary people, the impact is nothing more than traveling abroad, and the cost of studying abroad is higher. The impact on import and export trade enterprises will be greater, and exchange rate risk will lead to fluctuations in import costs and export income.
The exchange rate of RMB broke seven, which is the first time since the implementation of the exchange reform. When the market opened this morning, with the outbreak of sweater wars between China and the United States, and the wording of the ZJJ Economic Conference that "the downward pressure on the overall economy increased in the second half of the year", the market superimposed multiple concerns.
Then, after the RMB exchange rate broke seven, the short-term market anxiety has become more obvious, especially in the A-share market. Today, the market risk aversion is strong, leading to the continued strength of gold stocks. Then the market broke the exchange rate by seven and gradually stabilized the list. After the seventh break, the central bank quickly released the official interpretation after the seventh break, "showing that exchange rate fluctuations are within the normal range."
The follow-up will have a greater impact on the overall foreign trade companies and will continue to promote the long-term upward market of gold. In the subsequent fluctuation of RMB exchange rate, the central bank will take measures to maintain stability to a certain extent. After the market accepts the expectation of breaking seven, it will gradually stabilize.
The RMB exchange rate fell below 7 for the first time since 1978. It should be said that the market is in a certain panic. And what will happen to the RMB in the future, and what impact will it have? Specifically:
Since 1978, whether it is the cyclical fluctuation of economic growth or the "double whammy" of 15- 18 on stocks and foreign exchange, RMB exchange rate 7 has been a key indicator for the market to observe China's exchange rate policy, as well as the central bank's monetary policy and even its "determination". In fact, there were three "double blows" during 15- 18. During this period, the "no break 7" was finally successfully defended by several major means, such as "increasing the offshore RMB reserve ratio", "increasing the issuance of offshore RMB bonds" and "central bank propaganda".
Now it breaks 7. Judging from the trend of Hong Kong stock market and mainland stock market, it really reflects the market panic after "breaking 7". At present, we have not seen the central bank and the foreign exchange bureau actively preparing for the war during the above-mentioned 15- 18 "double-kill" period. But "Shout" is still the same!
From the perspective of exchange rate depreciation, the export price of export enterprises will be greatly and continuously reduced, which will bring favorable situation to export trade. From the perspective of importing enterprises, the import cost has increased. This is not conducive to importing enterprises and enterprises that rely on raw material imports.
From the perspective of exchange rate depreciation, it is unfavorable to foreign high-debt enterprises, such as enterprises that issue a large number of US dollar bonds. Take airlines for example, they have huge dollar debts. In the context of the continuous sharp decline of RMB exchange rate, the relative increase of monthly repayment of US dollar debt has brought financial costs and "exchange losses".
From the people's point of view, the depreciation of RMB exchange rate means that the cost of studying abroad and exporting is relatively rising. If the annual cost is $20,000, according to today's "depreciation 1.04", it will cost $200 more.
How the RMB exchange rate will operate in the future depends on:
First, the progress of Sino-US negotiations. It should be said that Sino-US trade is the main factor of exchange rate depreciation. Because the negotiations were unpredictable and lower than expected, cross-border funds fled obviously, which led to the depreciation of the exchange rate.
Second, the response measures of foreign reserves and the central bank. It should be said that after the Fed cut interest rates, the reason why China did not immediately follow suit was based on the stability of the exchange rate. Once China follows suit, it will accelerate the pressure of exchange rate depreciation.
Third, the stability of the overall domestic financial market. If the exchange rate depreciates at the same time, the stock market will fall sharply, which will usher in another round of "double kill" trend. For details, please refer to the three "double kills" trends from 15 to 18 in history.
After three or four months of "tug-of-war", the RMB exchange rate finally failed to hold the "7" mark, which is quite unexpected news for many investors, foreign trade enterprises and ordinary residents.
We originally thought that the central bank would take the initiative to intervene, at least to keep the bottom line of 7 and ensure the smooth operation of the economic and financial markets at this embarrassing juncture. However, the reality is so abrupt.
Today (August 5th), the international and domestic gold prices rose sharply, and Shanghai gold rose directly from 320 yuan/gram to 337.5 yuan. . . The growth rate is a bit surprising. The exchange rate broke 7%, causing market panic in a short time. Risk aversion spread, and funds piled up to embrace gold safe-haven products.
(Shanghai gold has been "a pillar of the sky")
So, what impact will the exchange rate break seven have on the market? 1, import and export trade will be greatly affected. We know from high school political textbooks that the exchange rate is lowered and the RMB is devalued. The same amount of foreign exchange can buy more domestic products, but at the same time, the cost of our imports will increase sharply. Conducive to exports, not to imports. It may be good news for export-oriented coastal foreign trade companies.
2. The pressure of capital outflow has increased. The original RMB of 100 can be exchanged for 14.7 USD, but now it can only be exchanged for 14. 1 USD. A wise man will choose to change his RMB into US dollars, so that his assets will not suffer a big depreciation. For "smart hot money", they will definitely speed up the pace of evacuation. In fact, some clues can be seen from the accelerated withdrawal of foreign capital recently.
With foreign capital gone and enterprises closed down, how to solve the increasingly severe employment pressure? How should 67 million fresh graduates find jobs every year? How do you pay off your mortgage, car loan and consumer loan?
3. The balance of financial market may be broken. The market trend of financial markets is greatly influenced by expectations and market confidence. At the slightest sign of trouble, the market will deflate like a punctured balloon. The Shanghai Composite Index fell by 2,900 points, and it seems that the 2,800-point mark will be difficult to hold. Once the popularity of the market dissipates, the potential crisis may not be far away.
abstract
Compared with the actual significance, the exchange rate breaking seven is more symbolic and has a far-reaching impact on people's fragile psychological defense.
The confidence and popularity of the market will inevitably be hit hard, and the subsequent expansion of the company's operations, the control of labor costs, and foreign investment will also be reduced accordingly. Once pessimism forms a unified understanding, the consequences are very terrible.
After RMB broke 7 and fell below 7, it quickly fell to 7. 1 mark, and there is still further downside risk.
The possible impact of RMB breaking 7:
1. RMB breaking 7 at this juncture will aggravate further market panic, so today's safe-haven varieties have risen sharply, such as: the international gold price broke through the 1450 mark and touched the 1459 line; Japanese yen, Swiss franc and other currencies all rose; Global bonds rose, and the yield of 10-year US Treasury bonds continued to drop to 1.75%, a three-year low.
2. There is a significant positive correlation between the trend of RMB exchange rate and the trend of A-share Shanghai Composite Index. After breaking 7, the market fell rapidly, and now it has hit a recent low, falling below the previous 2822 line and hitting 2821; Today, the overall mood of the A-share market is not good, and the three major indexes all fell more than 1%.
3. RMB breaking 7 may lead to global currency depreciation, which may lead to the outbreak of exchange rate war. Under the current economic background, the risk accumulation in the market may be aggravated, and the turmoil in the capital market will be further aggravated.
To sum up, short-term risky assets have further downside risks, so investors should hedge their risks and allocate some safe-haven assets.
National registered gold analyst
Sina Certified Financial Planner
Special analyst of Beijing Gold Economic Research Center 20 19 (involving futures, foreign exchange, gold and bonds)
Cooperative media include Xinhua News Agency, China Trade Export News, China Gold News, Xiamen Satellite TV, Chengdu Radio Economic Frequency, etc.
The fundamental reason why the exchange rate of RMB against the US dollar has broken 7 is that the US government's further tariff increase is expected to have a negative impact on China's export growth, trade surplus growth and economic growth in the future; Secondly, the recent economic growth in China is indeed facing obvious downward pressure; Thirdly, it is also related to the further emergence of domestic financial risks (Jinzhou Bank exposed risks last week and will soon be taken over by ICBC).
Economic fundamentals do not mean that the exchange rate of RMB against the US dollar will fall off a cliff after breaking 7. First, the Federal Reserve began to cut interest rates at the end of July, which helped stabilize the exchange rate of RMB against the US dollar. In fact, since the beginning of this year, the long-term spread between China and the United States (the difference between the yields of 10-year government bonds) has not fallen, but has risen; Secondly, the recent decline in the high level of the US dollar index also contributes to the stability of the RMB exchange rate against the US dollar. Judging from the short-term factors affecting the central parity of the RMB against the US dollar, the pressure from the domestic foreign exchange market (yesterday's closing price) is the main factor for the RMB exchange rate to break 7.
The above analysis means that the exchange rate of RMB against the US dollar will be stable at around 7 in the short term, unless the US government continues to impose import tariffs on China goods in the second half of this year. If the United States continues to escalate trade frictions, it will not be ruled out that the China administration will help export enterprises hedge the pressure of tax increase by devaluing the RMB against the US dollar under market pressure.