Fabric Products,Fabric Information,Fabric Factories,Fabric Suppliers Fabric News The alarm sounds: the currencies of 5 Asian countries turn on the red light again; the impact of the new crown epidemic weakens, and cotton prices return to fundamentals

The alarm sounds: the currencies of 5 Asian countries turn on the red light again; the impact of the new crown epidemic weakens, and cotton prices return to fundamentals



Recently, the already fragile global economy has been exposed to more and more problems under the impact of the epidemic. As the epidemic continues to intensify in Europe and the United States, people’s a…

Recently, the already fragile global economy has been exposed to more and more problems under the impact of the epidemic. As the epidemic continues to intensify in Europe and the United States, people’s attention is mainly focused on the West, so that many people have ignored the warnings issued by the currencies of five Asian countries including Indonesia and Thailand.

Alarm sounds: 5 Asian countries The currency lights up again

Recently, the Federal Reserve cut interest rates, restarted quantitative easing (QE), and even finally announced “unlimited money printing.” This series of “unlimited” operations has caused global concern. s concern. The most important reason for the recent frequent releases of water by the Federal Reserve is that the panic caused by the epidemic has caused a liquidity crisis in the country’s financial market.

One of the most significant impacts of the US dollar liquidity crisis is the frequent appreciation of the US dollar. Judging from the market chart, on March 19 this year, the U.S. dollar index once reached 102.84, the highest level since January 2017. However, 10 days ago, the U.S. dollar index closed at only 95.04, which means that the U.S. dollar index closed at 95.04 in just 10 days. The increase has exceeded 8%.

Don’t forget, on March 16, the Federal Reserve also announced an interest rate cut to 0 interest rates and announced the restart of a $700 billion QE, however, the U.S. dollar index did not fall as a result. Of course, this cannot be entirely blamed on the epidemic. Saudi Arabia’s sudden announcement of an “oil price war” was also an important reason for the sharp rise in the U.S. dollar index. However, the tightening of US dollar liquidity is an indisputable fact.

As the U.S. dollar index rises frequently, some emerging market currencies have begun to sound alarms. Among them, the exchange rates of five Asian countries, including India, Indonesia, Thailand, Malaysia and the Philippines, are even more confusing. ignore. Data show that the Indian rupee has fallen by 6.7% against the US dollar so far this year, and the decline in the last month has reached 5.9%. The Nikkei Asian Review stated that the Indian rupee has fallen to a record low.

In addition, the Indonesian rupiah has also fallen to its lowest level since the Asian financial crisis in 1998. It has fallen by more than 16% so far this year, and has dropped by a cliff of 15.95% in the past month; the Thai baht this year It has fallen by more than 8% so far, and has fallen by 3.34% in the past month; the Malaysian ringgit has fallen by nearly 7% so far this year, and has fallen by 3.56% in the past month. In contrast, although the Philippines has only declined 0.76% so far this year, the country’s exchange rate has fluctuated very much in the past month, which is not a good sign.

Recently, when a European bank conducted a stress test on the currency exposures of these five countries, it was found that these countries The alarm has been sounded. A trader in the bank’s trading department in Singapore even said that when the epidemic cannot be controlled in the short term and the economy continues to be sluggish, these currencies that experienced significant turmoil during the Asian financial crisis more than 20 years ago have been labeled as “fragile currencies.” “.

Foreign exchange reserves shrink and emerging market currencies may suffer a new round of sell-off

Emerging market currencies that have been hit hard by the new coronavirus may face a new round of selling as foreign exchange reserve data may shrink significantly.

Mexico’s weekly foreign exchange reserves data will be released on Tuesday, along with those for Indonesia, Taiwan, the Philippines, China, Malaysia, South Africa and Russia. This comes after data showed South Korea’s foreign exchange reserves fell by $9 billion last month and India’s foreign exchange reserves fell by $6 billion since the end of February.

The coronavirus pandemic has prompted a rush to the dollar as a safe haven, forcing central banks in emerging economies to dip into foreign exchange reserves to stem currency declines. However, shrinking foreign exchange reserves have also put them in a dilemma. On the one hand, they must maintain exchange rate stability during capital outflows, while ensuring that they have ammunition for future needs.

“I expect emerging market currencies to face more weakness as demand for the dollar will remain strong,” said Khoon Goh, head of Asia research at ANZ Bank in Singapore. “As central banks continue to smooth FX movements and provide liquidity to markets, we can expect reserves to decline further.”

Significant depreciation will cause a A series of syndromes. On the one hand, these countries have implemented strong foreign exchange controls to varying degrees and strictly controlled the outflow of US dollars, which in turn caused difficulties for local buyers to purchase foreign exchange and make payments.

On the other hand, currency depreciation has caused a sharp increase in costs for local buyers, who may choose to suspend trade or even stop paying the balance.

Therefore, all foreign traders, please be careful. Although order resources are relatively scarce now, you cannot blindly accept orders, and don’t step on the wrong side!

Extended reading

The global COVID-19 epidemic dominates commodity price trends In the process, the role of commodity fundamentals in leading price increases and decreases has been weakened, and cotton prices have fluctuated widely following market sentiment. The recent good news has given people a glimmer of hope for prices to return to value.

Crude oil out Bottom pattern

Judging from the trend of U.S. crude oil, after falling below 20 US dollars/barrel in the early stage, crude oil prices rebounded slightly and have now risen to 27 US dollars/barrel. As for whether To get out of the bottom shape, it is crucial whether the major oil-producing countries can reach an agreement to reduce production.

The current news about Saudi Arabia and Russia’s crude oil production cuts is still confusing, and the “war of words” between the two sides has never stopped. The intervention of the United States seems to allow the outside world to see the possibility of the two sides returning to the negotiating table. is increasing. The trend of crude oil futures confirms this. After all, the economy of oil-producing countries cannot bear the price of oil cheaper than water for a long time.

Global COVID-19 control results are beginning to show

The World Health Organization releases the 77th issue of the COVID-19 epidemic According to the report, as of 10:00 Central European Time on April 6 (16:00 Beijing time on the 6th), there were 1,210,956 confirmed cases of COVID-19 globally, an increase of 77,200 from the previous day.

Although the number of confirmed cases is still increasing rapidly, relevant experts predict that as European and American countries increase testing efforts, the previous backlog of “barrier lakes” to be tested will be eliminated, and new cases will be reported every day. The number of new coronavirus cases is expected to reach an inflection point soon (within a week), and U.S. stocks and commodities have already begun a sharp rebound during the Qingming Festival. Whether potential epidemics in India and Africa can be controlled in the future is crucial and requires continued attention.

The epidemic in China reached its peak during the Spring Festival. Commodity prices fell to their lowest point after the holiday. As the epidemic gradually eased, commodity prices began to recover slightly. Once the global epidemic reaches an inflection point, commodity prices may bottom out. Of course, whether the current price bottom is the lowest depends on the ultimate impact of the epidemic on the global economy.

If the impact of the epidemic on the economy continues to ferment, then the current rebound will be temporary, and there is still room for further decline in cotton. After all, textile and clothing export data will be worse from April to May. Whether the “bottom” generated by demand will cause prices to fall to the lowest level, further attention must be paid to the impact of other factors.

Review of commodity price fundamentals and dominant aspects

After experiencing this epidemic, domestic and foreign commodities Some prices are at historical lows, and some are at historical bottom ranges. In any case, commodity prices are far below their value levels, and cotton is no exception. The author has made statistics in previous articles. During the two market bottoms in 2008 and 2016, only in 2016 did the cotton price fall below the production cost, and then “U-shaped” and “V-shaped” reactions appeared respectively. change.

This time, cotton prices have been far below the cost line, and the decline has been greater than in 2016. This is due to the resonance effect of the spread of the epidemic and the decline in crude oil prices, and people’s emotions have also played a role. The role of fueling the flames. In the future, as the number of global epidemics slows down and is gradually brought under control, real changes in market supply and demand fundamentals will once again dominate cotton price trends. </p

This article is from the Internet, does not represent Composite Fabric,bonded Fabric,Lamination Fabric position, reproduced please specify the source.https://www.tradetextile.com/archives/36824

Author: clsrich

 
Back to top
Home
News
Product
Application
Search