Exchange rates of various countries have plummeted! Is the winter of cross-border e-commerce coming?

Cross-border sellers have been bleeding in their hearts these past two days. The exchange rate and stock market have fallen too sharply. The euro has directly fallen below 7 to around 6.9, and the US dollar has also dropped to 6.3. Sellers with balances in their stores have suffered heavy losses.

The euro exchange rate plummeted in a short period of time because of the Russia-Ukraine war. At several critical time points, the euro plummeted as the Russia-Ukraine war further deteriorated.

In fact, although the exchange rates of the euro and the US dollar against the RMB are both falling, these two situations should be viewed separately. First of all, whether it is against the US dollar or the RMB, the exchange rate of the euro is falling, which shows that the euro is really falling. As mentioned earlier, the sharp drop in the euro is expected because of the unclear war situation. The US dollar has fallen again against the RMB, but it is basically the same or even rising against the euro and other currencies. This actually shows that the exchange rate of the US dollar is stable, and the international exchange rate of the RMB is rising, and the RMB is becoming more and more valuable.

The reason for the rise of the RMB is actually quite simple. The risk aversion of European capital either chooses China or the United States. The European and American markets have recently made a big mistake - the personal property of Russian tycoons has been completely confiscated. Even the Swiss Bank, which has always maintained neutrality, has announced the freezing of the property of Russian officials and the government. You should know that the reason why Swiss Bank is famous all over the world and favored by wealthy people from all over the world is that it focuses on security and absolute confidentiality. It claims that any country or institution can query the information of Swiss Bank customers, and it provides the wealthy with an absolutely safe financial service. But now Swiss Bank has begun to stand in line under pressure from Europe and the United States and freeze the property of the rich.

"Private property is sacred and inviolable" is the most basic and deeply rooted logic and value of the European and American market economy. This wave of European and American blockade and plunder of Russian government property and even personal property has greatly shaken the European and American capital markets. Although invisible, the impact is no less than that of the 9/11 incident. Therefore, when capital chooses to hedge risks, it is not a problem to choose the United States or China. Now capital really needs to weigh the pros and cons of choosing the United States for risk hedging. Therefore, a large amount of capital has entered China for risk hedging, raising the RMB exchange rate.

The increase in exchange rate has the most direct impact on cross-border transactions. The money we get in hand becomes less, but overall this is not necessarily a bad thing. Let me explain in detail.

First of all, in the current world political environment, everyone is flooding the market with money. During the window period, the most lacking thing in the world is industrial capacity. All countries are using loose money. The money supply has increased, but the capacity affected by the epidemic has been frustrated. This has lost the premise of lowering the exchange rate to maintain the competitive advantage of goods. Every time you sell a product, the currency you get in exchange will become less and less valuable. The way to stop the loss is to appreciate the local currency.

The appreciation of the local currency is beneficial at this stage. There is no need to use internal consumer interests to subsidize external consumers to maintain the international competitiveness of goods as before. At the same time, the imported inflation can be exported to a certain extent.

With global inflation soaring, costs from raw materials to transportation are rising, and overseas-made products are bound to cost more. Chinese products with relatively lower inflation levels will have a greater price advantage. However, under inflation, the money in consumers' hands will increase the slowest. Everyone should be cautious in spending and put their budget on necessities. Therefore, the overall environment of cross-border e-commerce is favorable, but the extent of the benefits will be more reflected in some necessities and daily necessities.