The data analysis of the US dollar index shows that from 100.22 on October 3, 2000 to 165438 on October 24, 2002, the US dollar index fell by 24.93%, with an average annual decline of1.92. In the same period, the spot price of copper was 7762 USD/ton, lead 2 196 USD/ton, tin 20868 USD/ton and nickel 16563 USD/ton, which increased by 32 1.53% and 3565438 respectively. The average annual increase is as high as 24.73%, 27.0 1%, 18.63% and 7.92% respectively.
From the above analysis, we can see that there is a certain inverse relationship between the dollar index and the price of non-ferrous metals, but it is difficult to directly see the degree of correlation. Therefore, we made a correlation test on the data from 2000 to 20 12 and 13, and got the following table:
Table of correlation coefficient between dollar index and nonferrous metals
From the analysis of the above table, we find that the correlation between 2000 and 2002 is poor in the data collected by 13, but since 2003, the negative correlation between the US dollar index and non-ferrous metals has obviously increased. Among them, the correlation coefficient between lead/dollar index and zinc/dollar index in 2000-2002 and 2006-2008 was positively correlated. Through further analysis of historical events and data, we think it is probably in the context of the "9. 1 1" incident in the United States in 2006 and the subprime mortgage crisis in 2007 and 2008.
By reading and summarizing the literature and investment bank research reports, combined with the analysis of the changes in the correlation between the US dollar index and the price of non-ferrous metals in different historical environments, we come to the conclusion that the internal mechanism of the negative correlation between the two includes the following points:
$ (1) is the symbol of American economy. American economy affects American monetary policy, and policy signals affect stock market and foreign exchange market.
The dollar index measures the strength of the dollar by calculating the comprehensive rate of change of the dollar and a selected basket of currencies. The level of the dollar index directly reflects the demand for dollars from all countries in the world. The American economy is improving, and a strong dollar will enhance people's confidence in holding dollars, thus increasing the demand for dollars in various countries and making the American index rise.
The Federal Reserve usually judges the prosperity of American economy according to a series of economic data, such as non-agricultural data, GDP (gross national product), PMI (manufacturing purchasing managers' index), CPI (consumer price index) and consumer confidence index, so as to decide what kind of monetary policy to take to intervene in the economy, such as adjusting the interest rate of American federal funds, discount rate, yield of 30-year treasury bonds (also known as long-term bonds) and controlling the currency circulation. These policy signals will be transmitted to the stock market and currency circulation. For example, the quantitative easing monetary policy implemented by the United States many times since 2008 has promoted the increase of liquidity in the global capital market, made resource commodities such as non-ferrous metals "quasi-financial commodities" and promoted the formation of a bull market for non-ferrous metals. (2) The change of dollar index affects the change of purchasing power in non-dollar areas, and the change of demand for non-ferrous metals affects the price.
The US dollar index comprehensively reflects the exchange rate of the US dollar in the international foreign exchange market. The US dollar index fell, other currencies appreciated against the US dollar, and the purchasing power of non-US dollar regions increased. The enhancement of purchasing power has prompted non-dollar regions to increase their purchases of non-ferrous metals, and the expansion of demand has caused price changes of non-ferrous metals.
(3) The change of US dollar index affects the nominal price of non-ferrous metals, and speculation strengthens the price change trend of non-ferrous metals.
Nonferrous metals in the international market are usually priced in dollars. The depreciation of the US dollar pushed up the nominal price of non-ferrous metals, which doubled when it was transmitted to the stock prices of relevant listed companies. Non-ferrous metal futures and options priced in US dollars are more profitable, and speculation has contributed to the price increase of non-ferrous metals.
(4) The dollar index fell, and the depreciation of the dollar prompted non-ferrous metals to gradually become a new hedging tool.
Since the outbreak of the subprime mortgage crisis in the United States, international funds have withdrawn from the American stock market and other capital markets in order to prevent greater shocks and avoid greater losses. The profit-seeking nature of capital makes the capital transfer to a more favorable and safer place. At this time, the long-adjusted metal futures market is the most favorable haven for capital selection.
(5) The fluctuation of the US dollar index includes the trend of other currencies, and other monetary factors affect the price of non-ferrous metals.
According to the definition of the dollar index, the dollar index is the comprehensive rate of change of the dollar against a selected basket of currencies. Take the euro with the largest proportion as an example, a series of events that affect its trend will also be transmitted to non-ferrous metals by affecting the US dollar. 20 1 1 After the outbreak of the European debt crisis, the price of non-ferrous metals fell due to the fall of the euro. Until today, the price of non-ferrous metals has not returned to the highest point of 20 1 1 in March. However, with the turning point of the European debt crisis, we can see the slow rise in the prices of the euro and non-ferrous metals. This basket of currencies, including the euro, can be regarded as the counterparty of the US dollar, which has an obvious reverse trend with the US dollar. The most important factor affecting these exchange rate changes is the monetary policy of central banks, which will directly affect the exchange rate of countries against the US dollar, thus transmitting it to non-ferrous metals. Therefore, the monetary policies adopted by central banks will affect the prices of non-ferrous metals to a certain extent, especially the introduction of quantitative easing policies or similar policies will lead to the depreciation of local currencies, which in turn will lead to the appreciation of rival currencies and the rise of non-ferrous metals prices.
After reading the above information, you should know that the plunge of currency is generally beneficial to precious metals (non-ferrous metals).