US Dollar Raise Interest Rate: Is China'S Textile And Clothing Export "Opportunity" Coming?

The Fed announced that it raised the target rate of the federal funds rate by 25 basis points to 0.50-0.75%, raising interest rates entirely in anticipation of the financial market.

But Federal Reserve Chairman Yellen (Janet Yellen) said the interest rate increase was only "

The road is very small adjustment, the market interpreted as this: the Fed hinted that interest rates would increase faster in 2017, or three interest rates in 2017.

Although the US index continues to climb, the trend of the continued depreciation of the RMB is inevitable. (some experts suggested that before the inauguration of Trump in January 20th, the renminbi depreciated once in a while), which is conducive to China's export earning and textile and clothing exports rebounding rapidly. But what we need to pay attention to is the recent "tear up" WTO agreement between Europe, Japan and other countries, refusing to recognize the status of "market economy country", and still using the "substitute country" price in anti-dumping.

By raising the expected rate of increase in 2017, the US dollar surged to its highest level in 14 years, while emerging market currencies fell sharply and fell to a new low. Because the US dollar is the main settlement currency for international business, raw material prices are also calculated in US dollars, and financial assets are also denominated in US dollars. So what are the implications of the Fed's interest rate increase on China's textile industry?

First, the cost of importing high grade and high grade cotton (15825, 20, 0.13%) from US cotton and Australian cotton increased.

The US dollar and US dollar index were fed by the Fed raising interest rates (and hinted at a three increase in interest rates in 2017), with the exception of the "hawkish" drive.

The pressure is outstanding and import costs continue to rise, which is not conducive to imports of bulk commodities including cotton and corn (1543, 12.00, 0.78%).

Considering that Trump's election has changed the political environment of monetary policy, the increase in the deficit has led to a sharp increase in interest rates by the Federal Reserve. Therefore, textile factories and import enterprises that have 1% cotton import quotas within the tariff range are likely to increase the signing of foreign cotton imports in recent months, so as to lock in the cost of raw materials as soon as possible.

Of course, compared with the US cotton, Australia cotton, etc., the purchase of India cotton, Uzbekistan cotton and so on, the impact of the rise in the US dollar index is not big (currencies are depreciating against the US dollar).

Secondly, imports of India, Vietnam and other places of origin yarn and grey cloth influence is not obvious.

From the survey point of view, since 2015, China's looms and traders have purchased cotton yarn from Southeast Asia directly to the cotton mill, basically bypassing foreign trade companies or exporters, and mainly signed the "futures" yarn (about 70% of Vietnamese yarn imported is sold back to China in Vietnam). The buyers and sellers directly "negotiate" to a certain extent evaded the risk of the fluctuation of the US dollar exchange rate. However, because the devaluation of the currencies of the two currencies is inconsistent or the direction of adjustment may not be consistent, it is more advantageous for Chinese purchasing enterprises in 2017 to shorten the order period, advance shipment or negotiate with foreign mills to lock the exchange rate.

Grey cloth import.

Again, the Fed's interest rate increase does not mean that China's textile and clothing exports "outbreak" opportunities.

Therefore, in 2017, developed countries such as Europe and the United States set up barriers to import trade at various levels, frequent anti-dumping measures against Chinese products, and weakened the export competitiveness and channels of Chinese products. "Because of the great uncertainty of the time point of raising interest rates and the increase of interest rates in 2017, Chinese textile enterprises and foreign trade companies must be prepared to stand up."

For more information, please pay attention to the world clothing shoes and hats net report.