The global foreign exchange market as a whole shows a pattern of strengthening the US dollar and weakening the non-US dollar. As a major non-US dollar currency, RMB can't be immune to it. There are two reasons for the rise of the dollar, the most obvious being the weakness of the euro and the yen, which constitute the main part of the dollar index. Against the background of weak fundamentals and prospects in the euro zone, coupled with the shadow of energy crisis, high inflation and geopolitical risks, the euro has little motivation. The US economy and the Federal Reserve's monetary policy can support the strength of the US dollar index. The exchange rate is a relative price. Compared with Europe, the fundamentals of the US economy are better, including employment and manufacturing indicators, which can provide some support for the US dollar index.
The market usually predicts in advance the impact of the Fed's interest rate hike on the US dollar. If the American economy is not very optimistic, the dollar will fall after the interest rate hike is announced. It's a fact that buying is expected to sell. For China, the impact of the Fed's interest rate hike is not great, because only offshore RMB participates in international foreign exchange transactions, and the onshore impact is very small. For China, only things that can really affect international competitiveness will really affect China. For example, the tax reform in the United States is to attract enterprises and capital to the United States. This had an impact on China. For some emerging economies, this may mean capital outflows, which in turn will lead to a decline in exchange rates and further depreciation of other currencies, including the RMB. The most direct impact of currency depreciation is the intensification of capital outflow, which is the most serious blow to emerging markets.