China Fund News reporter Li Husheng
Since April this year, the rising momentum of the dollar index has been quite rapid, which has triggered the adjustment of the entire emerging market. The MSCI emerging market index has fallen one after another, with the latest closing point at 1130.22, down 11.22% from the highest point of 1273.07 this year. What should ordinary investors do in the future?
Jiang Chao of Haitong Securities pointed out that the driving force behind the rise of the US dollar is the higher yield of US bonds, which will increase the attractiveness of US dollar assets, accelerate the return of US dollars, and is an important support for the strength of the US dollar index. The fundamental reason for the rise of the two is that inflation expectations are rising and interest rate increases are guaranteed to continue.
The fund manager of QDII, a medium-sized fund company in Shanghai, pointed out that the interest rate increase in the United States was one reason. The interest rate increase in other mainstream countries in the world did not follow up, which opened the interest rate gap between the United States and other countries and contributed to the strong dollar.
Bai Haifeng, director of the International Business Department of China Merchants Fund and general manager of China Merchants Asset Management (Hong Kong) Co., Ltd., also expressed this view, saying that the important support for the strengthening of the US dollar index is the higher yield of US bonds. The main reason for the higher yield of US bonds is the rising expectation of the market for interest rate hikes, while the rising inflation expectation increases the expectation for interest rate hikes.
Bai Haifeng pointed out that the US dollar index may continue to rise this year against the background of the US Federal Reserve's interest rate hike, the rise of US dollar interest rate and the correction of the expected difference in the Eurozone, Japan and emerging markets. It is recommended to allocate US dollar assets, especially US technology stocks and Chinese dollar bonds.
However, some fund managers believe that the US dollar may not remain so strong in the future. The QDII fund manager mentioned above pointed out that the economy of other countries is also recovering, and the easing cycle will basically end this year or next year, so it may be a relatively high interest margin now, and the interest margin will gradually narrow in the future. Similarly, some fund managers believe that the growth rate of the US economy may slow down in the second half of the year, leading to a decline in the relative return expectation of US dollar assets, and the market's expectation that US exports and fiscal "double deficits" will continue to rise will also limit the strength of the US dollar.
However, for domestic investors, a strong US dollar means that QDII funds will lose less in the exchange of RMB against US dollars.
Domestic investors' investment funds are mainly in A-share market, Hong Kong stock market, US stock market and other emerging markets, of which the US stock market and other emerging markets are invested in the form of QDII. Although the strong US dollar is to some extent beneficial to the trend of US stocks, the main factors determining the market trend are still valuation and corporate profits, Whether the dollar is strong is not the dominant reason. On the other hand, the rise of the US dollar is not good for the gold investment that domestic investors are keen on. Investors should continue to pay attention to it.
