There was a hot search two days ago: The exchange rate of RMB against the US dollar is approaching the era of 6.2 yuan!
On March 3, the People’s Bank of China authorized the China Foreign Exchange Trading Center to announce that the central parity rate of the RMB exchange rate in the bank’s foreign exchange market on March 3, 2022 was: 1 US dollar to RMB 6.3016, an increase of 335 basis points from the previous trading day. In addition, the exchange rate of onshore RMB and offshore RMB against the US dollar is at 6.32. As of 6:54 pm on March 5, 1 US dollar was trading at 6.32 yuan.
The recent tense international geopolitical situation has gradually increased risk aversion in global markets. As the situation becomes unpredictable, self-help is gradually withdrawing from risky assets and moving closer to traditional safe-haven assets such as the US dollar and gold. The safe-haven function of the RMB has also further emerged.
In the short term, risk aversion is driving the appreciation of the RMB exchange rate. The RMB, which was originally vulnerable to external shocks such as changes in U.S. monetary policy, has gradually gained the ability to withstand external shocks in the past two years. With the U.S. dollar index gradually rising in the second half of last year, the RMB not only did not depreciate but began to depreciate. It shows the appreciation trend and has the characteristics of a safe-haven currency. But coming back to the market, the appreciation of the RMB is beneficial to my country’s imports, but it will also affect the export of my country’s commodities, reducing its export profits.
01
Profit is like a bubble, it suddenly disappears
The continued appreciation of the RMB is not good news for textile foreign trade bosses. Because many foreign trade companies generally use USD accounting and RMB settlement. When the RMB exchange rate appreciates from 6.5 to 6.3, the original exchange rate of 100,000 US dollars in RMB will shrink from 650,000 to 630,000, and the middle 20,000 yuan will be lost in vain. Although the loss in this example does not seem obvious, but if in this Over a period of time, the foreign trade boss received the order, but the loss in exchange rate will also damage the original profit of the order.
After all, business is all about profits, and no one wants their profits to be compromised. In fact, the foreign trade orders in the past two years have not been easy to do. Either the crazy rise in sea freight or the impact of the epidemic has caused the foreign trade market to shrink. Now the international situation is not clear, which has further affected the recovery of the foreign trade market.
02
Are the gold, three and silver coins still coming?
At the end of last year, many textile people thought that this year’s market would usher in a bright spring. However, the editor visited the market and found that those who agreed last year had some secrets about gold, three and silver this year. If the foreign trade market has not fully recovered, the domestic trade market will be under more pressure, but there is actually only so much domestic demand in the textile market.
Entering March, the order placement is not as busy as before. Most of them are small orders and prototypes, and large orders are simply rare. Terminal demand has not increased with the upstream price increase. A trader boss said: “Although the spring and summer fabric market is relatively good at present, many are actually consuming the inventory from last year or even the year before. Downstream garment factories are not as good as last year. It’s hot.”
Indeed, the imbalance between supply and demand will greatly trouble textile people. Foreign trade textile workers have to bear more. The freight is already high enough, but now overseas demand has become more difficult. Many orders are faced with unstable situations and the dilemma of not being able to place orders. A trader previously said: “Foreign trade orders are not as good as the arrival at the end of last year. It is not ideal and can only be said to be poor. Geopolitics has also had a greater impact on the company, and profits have declined. Foreign customers have now decided that the situation is not stable, so all orders No less.”
Entering the first ten days of March, the charm of gold, three and silver did not make textile workers breathe a sigh of relief. Instead, they felt a canteen in their hearts. After all, it used to be the peak season, but now costs are rising and downstream demand is weak, which makes many bosses worry. They are all in a not very promising state, but the market will always have its ups and downs, and I believe that the market spring will definitely come.
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