Under such circumstances, it is difficult for the exchange rate of RMB to keep strong against the US dollar in 2019, and there is little possibility of a unilateral appreciation.
The following is the full text of Lian Ping, Chief Economist of Jiaoyin Jinyan Center and his team's latest view, "The Dollar Index will not be very weak this year":
At present, the market is generally bearish on the dollar, the main reason is that the U.S. economic peak has passed, began to decline, and there are even views that the U.S. economy may have a recession. Affected by increasing downward pressure on the US economy, the Federal Reserve announced a moratorium on interest rate hikes and ended its contraction. Organizations even predicted that the Federal Reserve might cut interest rates in the second half of this year or next year, which further strengthened expectations of a short dollar.
We believe that some market expectations for the U.S. economic outlook are overly pessimistic, and that although the U.S. economy slows down, it is unlikely that a recession will occur soon. More importantly, the European economy is relatively less optimistic, the Japanese economy is difficult to make a significant improvement, and the future global political and economic uncertainty is still very large, hedging sentiment will be beneficial to the U.S. dollar, the U.S. dollar index is not expected to fall significantly this year, or even a slight rise.
I. The relative strength of major economies basically determines the trend of the US dollar.
We have pointed out that the trend of the US dollar can not be seen solely by the US economy. The strength of the US economy relative to the global economy is the most critical factor in determining the trend of the US dollar. In the composition of the dollar index, the currencies of Europe, Japan and other countries and regions accounted for a larger proportion. From 1973 to 1999, the Deutsche Mark accounted for 20.8%, the Japanese yen, the French franc and the British pound accounted for 13.6%, 13.1% and 11.9%, respectively. After the birth of the euro, it became the largest currency in the dollar index, accounting for 57.6%, the Japanese yen and the British pound accounted for 13.6% and 11.9%, respectively.
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