"Dollar smile theory" founder, asset management company Eurizon SLJ Capital CEO Zhan (Stephen Jen) released a report on April 4, said that inflation continued to cool will allow the Federal Reserve to implement interest rate cuts,In the next 18 months, the US dollar may depreciate by 10%-15% from the current basis.
U.S. inflation is expected to continue to decline at the same pace as it rose in 2021 and the first half of 2022, Zhan wrote in the report. In his view, the ECB and the Fed are close to the peak of interest rates and a rate cut is imminent.
He said that the central bank's previous nine interest rate hikes, coupled with the tightening of credit conditions triggered by the banking crisis, have shown that inflation is tending to decline. The strategist said the Fed could choose to cut rates next.
"Consistent with the dollar smile theory, receding inflation and a soft landing for the economy should push the dollar into the bottom of the 'smile curve', which could meanThe dollar will depreciate by 10% this year, with more room to fall next year.。”Zhan wrote in the report.
* "Dollar S mile Theory" (Dollar S mile Theory): During his tenure as a strategist at Morgan Stanley in 2001, Zhan and his team founded the "Dollar S mile Theory" (Dollar S mile Theory), which focuses on the fact that the US dollar will strengthen and outperform other currencies in two very different scenarios, when the US economy is very strong or extremely weak.
Similarly, Italian MPS Capital Services Banca per le Imprese SpA, which Bloomberg ranked yi in terms of forecast accuracy in the yi quarter of 2023, warned Luca Mannucci, its chief strategist,The dollar could depreciate by up to 5 per cent against other currencies in the second half of this year.
Luca Mannucci believes that due to the Fed's aggressive interest rate hikes to fight inflation and the lingering risks brought about by the recent banking turmoil,The United States will be dragged into recession..
Hongde Xiaobian found that the Federal Reserve is facing significant pressure to suspend interest rate hikes in the near future due to the bankruptcy of Silicon Valley Bank of the United States last month, which triggered a banking crisis and the successive failures of four banks, which brought risks to financial stability.
Foreign trade people who are concerned about exchange rate fluctuations know that the dollar index is closely related to the RMB exchange rate.
In 2022, the dollar index surged 7.9 per cent, the largest annual increase since 2015, or seven years, with z-high breaking the 114 mark, while the yuan depreciated 7.86 per cent against the dollar, ranking in the middle of the list of major Asian currencies.
However, since November last year, the US dollar has shown a volatile downward trend, falling from its 113 level to near its current 102, down more than 10% from its high in September last year.
In 2022, it is not uncommon for international institutions to adjust their forecast points for the RMB one after another (in the direction of depreciation), and 7.5 or even 7.8 forecast points. However, the consensus in 2023 is that,The yuan will sweep away the haze and continue to stabilize and recover.
Zhang Ming, deputy director of the Institute of Finance of the Chinese Academy of Social Sciences and deputy director of the Guo Family Finance and Development Laboratory, said that he was optimistic about the trend of the RMB exchange rate against the US dollar in the second half of 2023, and saidNo surprise that the yuan rose to 6.4-6.5 against the dollar at the end of the year.
In March, the dollar index fell from 105.0000 points to 102.5953 points, the dollar depreciated by 2.29, as a result, the euro rose zhi2.8 percent and the pound rose zhi2.5 percent.
Hongde Xiaobian learned that the RMB also fluctuated significantly in the current month, with an amplitude of 2.34 between 6.81 and 6.97 yuan onshore.The opening and closing price was 0.86% from 6.93 yuan to 6.87 yuan;The offshore interval is 6.80-6.99 yuan, with an amplitude of 2.79; Opening and closing for 6.95 yuan to 6.87 yuan rose zhi1.15%.
In this expectation, foreign traders must pay attention to exchange rate fluctuations, actively manage the risk of exchange rate fluctuations, adjust quotations in a timely manner, and even use exchange rate hedging products provided by banks.
"in fact, what we z need is exchange rate stability. as long as the exchange rate is stable, my price jiu will not move, so that my long-term orders can be stable and my revenue and profit can be guaranteed."-- This is the real idea of our foreign trade man z.
(WeChat Public Number: Hongde International Freight, Global Easy GO, Shipping Worry-Free)
Are you looking for reliable international logistics, shipping logistics, international freight forwarders, Guangzhou freight forwarders, Panyu freight forwarders?
Welcome to call service hotline: 020-84608436,
Or call 18933920302 (WeChat with the same number)
