Major changes to the Federal Reserve! What will happen to the US dollar next?

Yesterday, the Federal Reserve announced its latest interest rate decision. The market expected the benchmark interest rate to be raised by 50 basis points, and the benchmark interest rate corridor was raised to around 0.75-1.00%.

This is the largest single rate hike by the Federal Reserve since 2000 and the second rate hike this year, indicating that the United States has officially ended its quantitative easing policy and entered the process of raising interest rates.

The Fed's interest rate hike process is of great importance and has a huge impact on the stock market and the US dollar exchange rate. The interest rate hike means that the Fed is withdrawing US dollars and the liquidity of the US dollar is reduced. In theory, it is good for the US dollar exchange rate and bad for the stock market. The good news for the exchange rate is what everyone is more concerned about.

Before May Day, I just told you that the US dollar exchange rate is about to enter a window period, and everyone should quickly make arrangements. At that time, it was because my country's regulatory measures were suppressing the rapid appreciation of the RMB. At the same time, I also reminded everyone that there would be new policies to stabilize the exchange rate on May 15, and the US dollar-RMB exchange rate might fluctuate greatly in a short period of time. Now the Federal Reserve has announced the process of raising interest rates, which is good for the exchange rate. What we like to see most in cross-border transactions is the increase in the exchange rate. We must be happy when the US dollars we earn are more valuable.

But in fact, the rate hike this time was not very strong. The market generally expected 75 basis points. If the United States wants to curb the extremely high domestic inflation rate, it should at least increase 75 basis points this time. As a result, the Fed announced that it was only 50 basis points. Although it is the largest single increase in more than 20 years, the intensity is still a little lacking. Compared with the inflation rate, it can be said to be a drop in the bucket. Therefore, when the rate hike results came out, the US stock market, which should have fallen, rose by about 3% against the trend, almost returning to the level before the sharp drop in April.

Therefore, the benefit of this rate hike on the exchange rate is limited. Fortunately, the rate hike is not just one or two times, but a long-term process. The Fed also said that the next rate hike will be in a month, and it is likely to be 50 points. The rate hike process is already in full swing. In the short term, the exchange rate should still fluctuate. In the long run, the rate hike will inevitably make the exchange rate rise to a considerable level. Last time, I mentioned that suppressing the appreciation of the RMB is not a long-term policy, so the time for the US dollar exchange rate to recover may be relatively limited, but this rate hike is an extremely long process, which is likely to bring the US dollar to the RMB exchange rate back to the "7" era. The next year will be a critical period of cross-border trade prosperity.

We all know that traffic is king in the cross-border market. In order to compete for an ad space, sellers are willing to spend a lot of money on in-site advertising. Thanks to the crazy internal competition of sellers, Amazon's advertising bidding has soared several times since the epidemic.

The cost of obtaining traffic on the site is getting higher and higher. Many Amazon sellers are exploring ways to obtain traffic outside the site. The currently popular short video platform TikTok is one of them. The overseas version of Douyin has become the most profitable app in the first quarter of this year, and has been ranked first in the free application download list for several consecutive quarters. With a simpler and lower threshold than Facebook and Twitter, it has become one of the important channels for sellers to divert traffic.

Most sellers now choose to edit and repost popular videos, and then put Amazon product or store links on the TK homepage. This is the simplest way to get started, and there is no need to appear on camera or show content. There is one point that needs attention. If the number of views is large, the number of visitors on the homepage will also be very large. If you click on the link to enter the product details but do not buy and place an order, it will seriously affect the conversion rate of the product. Therefore, if the traffic volume is not large, you can directly add product links. If the traffic is large, it is best not to directly add a single link of your own product to the homepage. You can put the page of the brand store to attract traffic.

The benefit of adding a brand flagship store link to the TikTok homepage is that it can filter traffic without affecting the conversion rate of a single product. Users click in, those who are not interested will exit directly, and those who are interested will browse in the flagship store, and then click on the details page to view the products they have purchase intentions, which effectively protects the conversion of the listing. In addition, users can also use the brand flagship store to post new products through the "amazon post" function of the Amazon backend. We have also talked about the post function before, which has elements similar to social platforms. The fans attracted by Tiktok are also more receptive to this form of marketing. They can see new products at the first time, which is very effective for products in the promotion period.