The US dollar exchange rate fell below 7! Where will the sellers' profits go?

In the past two days, with the opening of epidemic prevention policies, the RMB exchange rate began to rise strongly. As of now, the offshore USD/RMB exchange rate has fallen below 7 yuan to around 6.9, returning to the 6 yuan era!

Previously, due to the continuous interest rate hikes by the Federal Reserve, the U.S. dollar exchange rate against the RMB once broke through 7.3. Many sellers speculated whether the super-strong dollar could raise the exchange rate to 7.5. As a result, before the December interest rate hike meeting, the RMB ushered in a wave of strong appreciation, directly causing the exchange rate to fall below 7.

Many sellers, anticipating the strength of the U.S. dollar exchange rate, gave huge discounts during the peak season, pushing their profits to the limit. After this major change in the exchange rate, these sellers are in tears. A calculation shows that the orders during the peak season originally had a small profit, but now they are directly losing money.

Not only the US dollar exchange rate, but also the yen and the euro against the RMB all experienced a sharp drop on the 5th. It can be said that the RMB is in a very strong position in the global currency market.

There are many factors behind this wave of strong appreciation of the RMB. On the one hand, the RMB has been depreciating sharply since the middle of the year. The exchange rate was around 6.7 in June, but it had already broken through 7.3 in October. Such depreciation is quite rare, and the central bank may make adjustments at any time.

Secondly, the core inflation rate of the US dollar has been gradually controlled under multiple rounds of interest rate hikes. Many parties agree that the Fed's interest rate hikes in December will begin to slow down. The pessimistic expectations of interest rate hikes have seriously affected the strength of the US dollar. Since entering December, the upward momentum of the US dollar in the global foreign exchange market has slowed down. The news released by the Federal Reserve also shows that the December interest rate hike is likely to be only 50 basis points, and the interest rate hike has entered a deceleration period.

The strength of the RMB and the weakness of the US dollar caused a sharp drop in the exchange rate in the past two days. In addition, the interest rate hikes have slowed down this month and the US dollar has insufficient momentum. How the exchange rate will move in the future will depend on the situation on our side.

After the epidemic prevention was relaxed, all regions were actively resuming production and work + introducing foreign investment. Maintaining a relatively low exchange rate can effectively stimulate foreign trade and overseas investment. It depends on how the central bank will regulate it next. Sellers who did not withdraw money in the past two days and waited for 7.5 suffered heavy losses, because the exchange rate is quite uncertain in the future. So I suggest that you should abandon the habit of hoarding a wave of balances and wait for the exchange rate to be good before withdrawing money. Next, you should develop the habit of withdrawing money in time. As long as you have money to withdraw, withdraw it directly, don't hoard it!