One role: the "thermometer" of the strong dollar
Earlier, we learned about the development of the US dollar and the reasons for the birth of the US dollar index. We learned that the US dollar index is actually the exchange rate of the US dollar against the euro and other foreign exchange currencies.
In order to visually show the strength change of the US dollar against a basket of foreign exchange currencies, NYCE initially set the base period of the US dollar index as 1973, because since then, the Smithsonian Agreement has officially replaced the Bretton Woods Agreement, and the fixed exchange rate system has been eliminated by the floating exchange rate system. National currencies can float with each other instead of "following the trend". At the same time, NYCE stipulates that the base of the US dollar index is 100.
Whether stock investors are familiar with it, yes, because the Dow Jones index, Shanghai and Shenzhen index and Paris CAC index are also produced in this way.
With the base period and base, it is easy to observe the strength of the dollar through the dollar index. For example, on February 3rd, 1985 and 125.87, the US dollar index closed at 125.87, indicating that the US dollar has appreciated by 25.87% against a basket of currencies such as the Japanese yen. Similarly, in June 2009 165438+ 10/6, the US dollar index closed at 74.847, which means that the US dollar depreciated by 25. 153% against a basket of foreign exchange currencies.
The strength of the dollar represents the rise and fall of the United States to a certain extent, and more directly reflects the position of the United States in the global economic structure. Obviously, the depreciation of the dollar is not conducive to the decline in the importance of the US economy.
The second role: the weight of international trade.
As mentioned above, the US dollar index reflects the strength change of the US dollar against a basket of currencies, and the US dollar is the main international trade settlement currency. Therefore, the rise and fall of the US dollar index always affects the competitive pattern of international trade.
From the beginning of March 2009 to 165438+20091mid-October, the US dollar index plummeted from the highest 89.624 to 74.679. With the continuous depreciation of the US dollar (RMB and other foreign currencies have appreciated against the US dollar), the export price advantage of domestic goods in the United States has become prominent, while countries such as China, which mainly rely on export-oriented economy, have fallen into the "ice age" of trade. According to the data of the National Bureau of Statistics, before 2009 10 month, China's total import and export volume decreased by about 20% year-on-year, of which the sharp decline in exports to the United States was one of the main reasons.
Of course, since there is no RMB in the US dollar index, it cannot be assumed that as long as the US dollar index falls, the RMB will appreciate and foreign trade will weaken. However, judging from the cyclical changes of the US dollar in the past three years, excluding the factors such as tariffs and anti-dumping, every decline of the US dollar index will suppress China's export trade. Especially, many OEM (including OEM and ODM enterprises) factories in the coastal areas of China and some enterprises that rely heavily on foreign markets will see their performance decline and their corresponding sectors and stocks will be left out in the cold. Investors should obviously pay attention to this.
Especially at present, the proportion of import and export in GDP is still high, and the long-term one-way operation of the US dollar index has a vital negative impact on China's foreign trade, which in turn plays an important role in China's economic development, which in turn affects our investment environment and wealth appreciation.
The third role: the "meter" of commodity prices
In March 2009, Zhou Xiaochuan gave you a lesson about SDR: In the article "Reflections on Reforming the International Monetary System" written by Zhou Xiaochuan, he proposed to create a new international reserve currency to replace the US dollar, and believed that SDR replacing the US dollar was beneficial to the improvement of the international monetary system. This initiative is not only supported by Australia and emerging market countries represented by BRIC countries (Russian, Brazilian, Indian and China), but also echoed by international organizations such as the United Nations and the International Monetary Fund (IMF). Xu Xiaonian and other domestic economists also agree with this plan.
However, the call for reform is not the same as the action of reform. The author believes that under the background that Europe and America are still wearing "a pair of open-backed pants" and the IMF and the World Bank are still "dominant in Europe and America", including the euro, the yen, SDR and even the "Asian dollar" under discussion, it is impossible to shake the status of the US dollar as an international settlement currency.
Therefore, as the "wind vane" of commodity prices, the US dollar remains an unchangeable fact in the short term.
From CBOT to the New York Mercantile Exchange, from NYBOT to LME, to the Buenos Aires Stock Exchange, and then to the international spot trade of soybeans in South America and rice in Southeast Asia, we can all see the US dollar.
Since the US dollar index has become the "frame of reference" of the value of the US dollar, the rise and fall of the US dollar index represents the rise and fall of commodity prices denominated in US dollars.
All kinds of commodities are negatively correlated with the US dollar index in general, especially the prices of crude oil and gold are more regular with the trend of the US dollar index. When the dollar index is superimposed with the two indexes, we can see that when the dollar index falls, crude oil and gold often run counter to it, and the correlation coefficient between them is close to -0.95, which is highly negative. This phenomenon occurs because the change of the US dollar index will be transmitted to commodities through various channels, leading to the opposite trend of commodities and the US dollar index.
Taking the whole process of the US dollar index falling to nearly 74 from the beginning of 2009 to165438+1October 25th as an example, gold has been approaching 1200 USD/oz.
First of all, when the dollar index went down, the intrinsic value of gold did not change. Therefore, its price tag will rise because the reference system of the pricing unit "shrinks".
Secondly, the decline of the US dollar index indicates the appreciation of a basket of currencies such as the euro and the RMB. When investors see that they can buy more gold with the same non-US dollar currency than before (an important premise: gold is still the most ideal currency in investors' minds), it will naturally trigger the trend of gold consumption, and strong demand will push up the price of gold, which is another transmission process that the decline of the US dollar index leads to the rise of gold.
Furthermore, from the perspective of international trade, the main producing areas of gold are mostly located in South Africa, Congo and other regions. When the US dollar index falls, the currencies of these gold-producing countries appreciate relatively, the production cost of gold will rise (in exchange for less local currency), and the export competitiveness and enthusiasm of gold-producing countries will weaken. As a result, gold giants such as Bias may reduce their mining capacity, and the reduction of supply will naturally lead to an increase in the price of gold.
Not only gold, but also other commodities will experience the above-mentioned price increase because of the decline of the US dollar index, but the correlation may not be as great as that of gold and the US dollar index. In fact, looking back at the food crisis that ravaged the world in 2008, we also found that the US dollar index fell for a reason.
Role 4: the "crystal ball" of central bank interest rate
Every time the Fed adjusts its benchmark interest rate, it will have a significant impact on the US dollar index. Since the US dollar index includes six other currencies, such as the euro, the trend of the US dollar index may fluctuate with the changes of other currencies in a certain period of time. If the dollar index rises gradually when other currencies weaken, the profits of export enterprises such as American automobile manufacturing will be damaged and their international competitiveness will be weakened.
At this time, the Fed may lower interest rates, increase the supply of dollars, push down the dollar index, and protect the position of domestic enterprises in international trade (of course, the cost of purchasing raw materials from abroad has increased).
Especially from the end of 2009 to the first half of 20 10, this is a crucial period for the US economy to regain its glory. The Fed absolutely hopes that the current decline of the US dollar index can continue. From Bernanke's continuing to maintain ultra-low interest rates to Obama's hope for RMB appreciation during his visit to China, we know that the White House and the Federal Reserve will try their best to keep the US dollar index at a low level of around 76 or even lower until the unemployment rate in the United States is reduced and the economy fully recovers!
The dollar index is not the dollar, but it has the same function and status as the dollar; The dollar index has a great influence on international trade, commodity prices and central bank interest rates, and it is offset by the three.
This "action and reaction" relationship can be seen everywhere in the financial market. It is also the intricate "interaction" between various factors that makes our investment difficult and unusual, but it is also very interesting.
We spend a lot of time reviewing the familiar but important index of the US dollar index, hoping that investors can use this extremely important tool to observe the changes in the monetary system, predict the changes in international trade, analyze the rise and fall of commodity prices, and guess the introduction of central bank policies in various countries. ...
In a word, in the complicated financial market, if investors can use the right tools at the right time, such as CRB index and US dollar index, they can make more confident and logical investment decisions, and let us find more duckweeds that can survive the ups and downs of the financial sea.