Why has the US dollar continued to strengthen since the middle of the year? Since the middle of the year, the US dollar index has continued to strengthen, rising from below 90 in early June to a recent high close to 97, an increase of nearly 8%. Since the beginning of the year, the US dollar index has gone out of the “n-type” trend after twists and turns. From January to March, the US dollar index rose from about 89.4 to about 93; 4. In May, it fell again from about 93 to about 90. Since the middle and early June, it has continued to fluctuate and rise, up to 96.8, with a large lifting range.
During the epidemic period, the US dollar exchange rate was mainly affected by the phased risk aversion and the expected fluctuation of economic policies under the influence of the epidemic situation. In the first half of 2021, it was mainly disturbed by the economic expectation fluctuation between the United States and Europe under the dislocation of epidemic situation and prevention and control effect; The two waves of rapid rise of the US dollar index in the second half of the year occurred respectively in the stage of capital risk aversion and expected changes in economic policies after the emergence of delta and Omicron viruses.
Where will the US dollar exchange rate go in 2022? In the “Scene restoration year”, the pricing mechanism has returned to fundamentals. In the past two years, the US dollar index fluctuated, which is highly related to the interpretation of the epidemic situation; Although the vaccine is listed, the imbalance between global supply and demand and repeated superimposed epidemics are important reasons for the strength of the US dollar in 2021. Experience shows that the trend of the US dollar index is mainly driven by the relative strength of the US and non US economies. During the epidemic, the evolution of the prevention and control situation in various countries was not synchronized, resulting in the greater impact of the “epidemic” situation of the exchange rate trend. With the improvement of vaccine effectiveness and technological development, and the vaccine supply from shortage to surplus, the exchange rate driving logic may change from “epidemic” disturbance to “Fundamentals” in 2022. The epidemic treatment method has developed from initial hospitalization to the combination of small molecule targeted drugs and vaccines + oral drugs. The trend of “influenza” is accelerating. In addition, the production capacity of major listed vaccine manufacturers in the world is expected to increase from less than 11 billion doses in 2021 to about 22 billion doses in 2022. The impact of the epidemic on exchange rate pricing will be significantly weakened.
When will the dollar index peak and its future trend? 1h2022 will peak and fall, with little pressure on the RMB exchange rate. In 2022, the global vaccine supply will increase significantly, and the elasticity of non-U.S. economies may be greater than that of the United States, the U.S. dollar index may peak and fall, and there is little pressure on RMB devaluation. In 2022, the global vaccine planning capacity will reach 2-3 times of the global population, and the “scenario repair” may be accelerated. In the early consumption scenario and supply chain scenario, the economic repair elasticity may be more obvious in the regions and industries with serious injuries. The pricing mechanism of financial assets will be greatly improved, and the performance of some assets may form a mirror image with the epidemic period. Some macro signals have begun to prompt the logic that the US dollar index is about to peak, and it is expected to see a high within 1-2 quarters. The fastest growth stage of the US economy has been seen, and the market has relatively fully digested the normalization of the US fiscal and monetary policy; Under “scenario repair”, the repair elasticity of Europe and other non-U.S. economies may be higher than that of the United States. Considering the economic situation and policy rhythm, the US dollar index may peak and gradually decline in the first half of next year. Under this background, the “depreciation expectation” of RMB exchange rate need not be too worried.
Risk tips: the policy is too tight, the epidemic variation exceeds expectations, the supply chain repair is insufficient, and the demand drop is too large
