On September 25, CITIC Securities said that the Federal Reserve’s September interest rate meeting continued to maintain its hawkish position, and its tightening of the follow-up guidance exceeded market expectations. The Federal Reserve’s unexpected operation has also led to the devaluation pressure on non US dollar currencies such as the RMB and the Japanese yen in the near future.
Recently, the RMB exchange rate has depreciated rapidly. It is estimated that the Central Bank may have restarted the “counter cyclical factor”. Although the dollar index may continue to strengthen in the short term due to the hawkish stance of the Federal Reserve, and there is a possibility of further devaluation of the RMB, the devaluation is expected to be limited in view of the operation of the Central Bank.
The strong dollar also brought about a sharp depreciation of the yen. The Bank of Japan intervened again when the yen approached its 1998 low. We need to continue to pay attention to the changes in monetary policies of various countries under the strong US dollar.