Stephen Jen, a former Morgan Stanley currency strategist, has proposed the famous “dollar smile curve”: the dollar strengthens when the economy is bad and prosperous. Din Rail Terminal Blocks, D-Sub Hoods and Road Safety Reflectors should be noted.
With —— on the fed’s eagle-like rate hike, the dollar index hit a new 20-year high, and non-US currencies fell sharply.
Due to the current status of the US dollar in the global monetary system, international trade is generally settled in the US dollar. When a country’s local currency depreciates sharply against the US dollar, the import cost will rise sharply simultaneously. So we’ve seen a lot of buyers among non-American customers demanding discounts, deferred payments, and cancellations.
The following is the largest depreciation of this year some countries, foreign trade people ship these markets, must pay attention to the safety of payment!
NO. 1 euros
The euro has fallen 15 per cent against the dollar so far this year. On August 22, the euro fell below parity against the dollar for the second time this year, falling to 0.9926, the lowest level since 2002. And the depreciation of the euro seems to have just begun.
Morgan Stanley expects the euro to fall to 0.97 for the quarter as the Fed gets stronger, and Nomura targets 0.975 at the end of September, before markets could expect 0.95 or lower as power supply pressures increase the risk of power outages.
Economists expect the euro zone CPI to hit 9% in August, another record high and more than four times the target of 2%, while a weaker euro has made inflation problems even worse by raising import costs.
NO. 2 pounds
The pound suffered its worst month since the 2016 Brexit vote in August, when it fell more than 4 per cent against the dollar. Sterling has fallen 11.8 per cent against the dollar so far this year, making it one of the worst-performing currencies in the G10.
Goldman Sachs believes Britain could fall into recession in the fourth quarter. Citi forecasts that UK inflation will break through 18 per cent in January 2023.
NO. 3 yen
The yen briefly traded on and fell above the dollar to Y 139.50 on the Tokyo currency market on Sept. 1, its lowest level in 24 years. In August alone, the yen fell nearly 4% and has fallen more than 18% so far this year!
However, the Bank of Japan is not prepared to intervene in the weaker yen. Haruhiko Kuroda, president of the Bank of Japan, recently stressed that financial policy is not based on the yen, but based on prices.
A weaker yen is indeed good for exports, but it has also led to higher prices of imported raw materials. About 60 percent of the companies surveyed said their performance was negatively affected by the rapid depreciation of the yen, according to a survey by the Imperial Japan Data Bank. Of the more than 10,000 companies surveyed, 61 percent said the weaker yen had a “negative impact”. Imperial Data Bank said that the depreciation of the yen led to the expansion of exports did not show, but pushed up import price.
NO.4 won
The South Korean won has fallen to its lowest level since 2009, and has fallen 11 per cent against the US dollar so far this year.
Governor of the Bank of Korea cheung-yong Rhee said prices could not rule out following the Fed to get out of control. The Bank of Korea has now raised its forecast for consumer price index (CPI) growth to 5.2% this year. South Korea’s CPI rose 6.3 percent in July from a year earlier, up from 6 percent in June and at the highest level since the November 1998 financial crisis.
NO.5 The Turkish lira
This year, the Turkish lira has depreciated by about 26 percent as of mid-August.
Turkey is now the world’s ” king of inflation, rising 79.6 per cent year on year in July, a 24-year high. In Istanbul, Turkey’s most populous city, prices rose 99 percent in July from a year earlier.
Retail merchants in Turkey say they used to buy bags of food and pay less than 100 lielas, but now they can buy a few pounds for desserts, snacks and soda. The Turks admitted that basic living supplies became a luxury, “in a bad situation”.
NO.6 The Argentine peso
Inflation hit 71% in July, the highest in nearly 30 years, and economists had expected it to soar further to 90% by the end of the year! Meanwhile, the Argentine peso (black market) broke through the psychological mark of the 300 peso on July 19 and fell to an all-time low of the 338 peso on July 22. In the official market, the Argentine peso has also lost 37% against the dollar over the past year.
Argentina is an export-oriented economy that imports large quantities of its consumer goods. The surge in international energy and raw materials and other commodities has pushed up the imported inflation, while the sharp depreciation of the currency further aggravates the imported inflationary pressure. To prevent hyperinflation, Argentina’s central bank sold dollars every day to avoid weakening the peso.
In addition, Argentina’s central bank issued Notice No. A7532 on June 27, extending the import of foreign exchange controls to the import financing system for services and non-automatic license products for three months to September 30 this year. Recently, the Argentine Customs also began to crack down on import and export trade violations, mainly involving false reporting of goods prices in import and export trade, such as low open export invoices and high import invoices. The first round of rectification action involved 13,640 businesses and 722 companies, with the total fop price of goods being about 1.25 billion US dollars.
NO.7 The Egyptian pound
—— Global wheat prices soared, making Egypt the world’s largest wheat importer, and they were hit hard, with some food costs rising by 66 percent, pushing inflation up to 15 percent.
The Egyptian pound is currently trading at $19.1, the second lowest on record, and is below that only during the winter downfall of 2016.
Foreign traders have reported that exports to Egypt are stranded in the port because buyers cannot issue a letter of credit.
NO.8 Hungarian Forint
Major currencies in Eastern Europe have also suffered another blow by the eurozone recession and the weaker euro.
Hungary’s forint has not even outperformed the Turkish lira this year, losing more than 26 per cent against the dollar. The Hungarian media even reported on the topics of “Forin was the world’s weakest currency”, “Forin was hit hard” and “Forin fell freely against the dollar and the euro”.
NO.9, Zloty, Poland
Poland’s zloty has lost 12% against the dollar since the end of February. Inflation is now as high as 15.7%.
Poland, which has been targeting Russia, has also faced back sanctions. Poland is a major European coal power producer and the largest coal producer in the European Union, producing more than 50 million tons of coal a year, but it still imports about 12 million tons of coal a year. Millions of Polish households will face a winter coal shortage following the Polish government’s decision to impose sanctions on Russian coal.