With the global spread of the Omicron variant of the new crown virus, US President Biden recently urged Americans not to panic about this, and said that the United States is working with pharmaceutical companies if new vaccines are needed to prevent this variant. Dissemination, contingency plans will be developed.
He said that the United States will not re-implement the lockdown to combat the spread of Omicron variants, and will announce the winter anti-epidemic strategy, and urge people to get vaccinated, vaccinated with booster shots, and wear masks.
It can be seen that the US government has given the people a peace of mind.
U.S. stocks reversed and closed down
Recently, the Centers for Disease Control and Prevention (CDC) of the United States announced the discovery of the first patient infected with the Omi Keron mutant strain. The infected person was a traveler who returned to San Francisco, California from South Africa on November 22. Dr. Anthony Fauci, the Chief Medical Adviser to the President of the United States, first confirmed the news.
This caused the major stock indexes to turn from rising to falling. The Dow once fell by about 1,000 points from its intraday high to 34,006.98 points as low as possible.
The market is still paying attention to the inflation situation in the United States and its impact on the Fed's monetary policy. According to the Fed’s Beige Book survey report released recently, economic activity in most Fed jurisdictions increased moderately in October and early November. Some regions pointed out that despite strong demand, growth has been limited by supply chain disruptions and labor shortages.
The Fed's Beige Book stated that prices rose at a moderate to strong rate in October-November, and all economic sectors generally experienced price increases. Due to strong demand for raw materials, logistics challenges and tight labor markets, input costs have seen a broad increase.
The report also shows that the overall activity outlook in most regions is still optimistic, but some sources point out that there is uncertainty about when the supply chain and labor supply challenges will ease.
ADP chief economist Nela Richardson said that the job market continued to recover strongly amidst the challenges of last month. The number of new jobs created in November reached 543,000, a slight increase from earlier this year, but still less than the level before the epidemic. 5000000.
RMB exchange rate hits new high since June
What will happen to China at the other end? Will the RMB exchange rate be affected?
Vice Premier Liu He said at the 9th China-Europe Forum Hamburg Summit that China’s economy has continued to recover, and growth, employment, prices, and balance of payments are generally normal. It is expected that the annual economic growth will exceed the expected target.
In addition, the China Manufacturing Purchasing Managers Index (PMI) for November 2021 released by the China Federation of Logistics and Purchasing and the Service Industry Survey Center of the National Bureau of Statistics was 50.1%, an increase of 0.9 percentage points from the previous month. This shows that the PMI index has rebounded significantly in November, and it has returned to above the line of prosperity and decline, and China's economy has begun to return to a full recovery trend.
Next, let's look at the performance of the renminbi. On December 1, the exchange rate of the renminbi against the U.S. dollar rose and fell, hitting the 6.36 mark at one time, which was only one step away from the year's high of 6.3565.
On the same day, the central parity of the RMB against the US dollar rose by 101 basis points from the previous trading day to 6.3693, a new high since June. In the first 11 months of this year, the central parity of the RMB against the US dollar has appreciated by 2.23%.
Based on the 6.4854 quotation of RMB against the US dollar on September 30, as of November, the RMB exchange rate has risen by nearly 1,000 basis points as a whole.
The short-term trend of the RMB shows an appreciation trend
Since the beginning of this year, the renminbi exchange rate has gone out of an "M" pattern-depreciation, appreciation, and shock.
It is worth noting that since September, the US dollar against the RMB exchange rate and the US dollar index have begun to diverge significantly, and the RMB exchange rate and the US dollar index have both strengthened at the same time.
Market analysis believes that with the strong support of foreign exchange settlement, the trend of the renminbi will continue to appreciate despite the strength of the US dollar.
Tao Jin, deputy director of the Macroeconomic Research Center of the Suning Institute of Financial Research, believes that under the continuing impact of the global epidemic, external demand continues to increase, and the substitution of Chinese products for foreign demand is still low, product price elasticity is small, and foreign exchange settlement is supported by exports. More, the market has greater demand for the RMB, and the RMB exchange rate has therefore remained strong.
At the same time, the Fed's reduction of bond purchases is still far from the large-scale tightening of monetary policy, and at least it will not suppress the current renminbi in the short term.
Tao Jin suggested that consumers who have short-term foreign exchange needs can carry out operations on a certain scale. The RMB exchange rate is likely to remain stable in the future, and two-way fluctuations are the norm.
When looking forward to the exchange rate trend in 2022, the Bank of China Research Institute pointed out that under the influence of increasing downward pressure on the Chinese economy, a probable slowdown in external demand growth, and the normalization of the Federal Reserve's monetary policy, the RMB exchange rate may face certain depreciation pressures.
However, China's economy still has strong resilience, and the government's policy control tools are sufficient, and there is a high probability that the RMB exchange rate will still fluctuate within a reasonable range.
