RMB appreciation, exchange rate fluctuations

The super-commodity cycle was too much to steal the spotlight, but the volatility of the foreign exchange market was ignored-the weaker dollar indirectly stimulated the rise of commodities, and the renminbi also went crazy silently.

As of 16:30 on May 10, Beijing time, the onshore renminbi closed at 6.4173 against the US dollar, up 416 basis points from the previous trading day, a new high since June 2018. The central parity of the renminbi against the US dollar reported at 6.4425 that day, an increase of 253 basis points, a new high since February 10. Beginning in late February, the U.S. dollar once strengthened due to the rapid advancement of the U.S. vaccine injection program, and the U.S. dollar/renminbi once reached a staged high of 6.57. However, with the advancement of the global vaccine popularization program and the fall in U.S. debt yields, the U.S. dollar began to recover in April. Downturn. As of 18:16 that day, the US dollar index was at around 90.17, a record low in nearly ten weeks.

Zhu Yanhua, a foreign exchange business expert at the International Business Department of the Bank of Communications, told China Business News that after excluding GDP growth, M2 (broad money) in China and the United States showed a reverse trend. China is gradually recovering water, while the United States is "overcovering water and hard to recover." The level of liquidity is an important factor affecting the exchange rate. It is expected that the renminbi will still have a strong momentum.

Although in the long run, the appreciation of the renminbi is due to optimism about China's economy, which is considered a good situation, in the short term, it does pose a greater challenge to textile foreign trade enterprises.

This year's traditional peak season "Golden Three and Silver Four" are all inadequate, and it is difficult for the May market, which is gradually moving towards the off season, to make a difference. Even if foreign trade orders return, the textile companies that can really profit from it are still a small part, and most foreign trade companies may lose even more.

Under such background pressure, textile companies have made inventory clearing and capital mobilization the top priority, but profits are secondary. Therefore, some market goods in the textile market have almost no profit or even a loss. Although the order goods have a certain profit, the overall profit situation is not good.

In such a general environment, a small amount of exchange rate fluctuations may change a foreign trade order from profit to loss.