Foreign exchange prices are closely related to stock prices. Generally speaking, if a country's currency is based on the appreciation policy, once the currency depreciates, the stock price will rise and fall. The foreign exchange situation will have a great impact on the stock market. With the rapid development of contemporary international trade, exchange rate has more and more influence on a country's economy. The economy of any country is affected by exchange rate fluctuations to varying degrees, and the degree of influence of exchange rate fluctuations on a country's economy depends on the degree of openness of the country. With the continuous improvement of a country's openness, the stock market is increasingly affected by the exchange rate.
The most direct impact is import and export. None of the benefits brought by the strong RMB belong to importers, that is, enterprises that rely on the supply of foreign raw materials. On the other hand, sports lost money because of the decline in competitiveness. When the local currency depreciates, the situation is just the opposite. Both appreciation and depreciation will have positive and negative effects on the company's performance and economy, so it is too simplistic to buy and sell stocks only according to exchange rate fluctuations.
The most direct impact of exchange rate changes on stock prices is reflected in the stocks of import and export companies. It is reflected in the stock price through its influence on the company's business and profits. The main manifestations are: if most of the company's products are sold in overseas markets, when the exchange rate rises, the competitiveness of products in overseas markets will decline, the company's profits will fall, and the stock price will fall. If the company relies on imports for some raw materials and its products are mainly sold abroad, the rising exchange rate will reduce the cost of imported raw materials and increase profits, thus making the company's share price have an upward trend. It is expected that the exchange rate will rise, the currency will appreciate, and some funds will enter the stock market, which may rise. Therefore, investors can make correct investment choices according to the overall impact of the above exchange rate fluctuations on the stock price and changes in other factors.