Langstaff Gateway Condos toronto. What is the impact of the devaluation of RMB on Canadian real estate? China’s RMB suddenly depreciated by 2%, with the median rate of 1 US dollar to RMB 6.1162 to close at 6.2097.Please Visit: Langstaff Gateway Condos toronto to Get Your VVIP Registration Today!
Canadian and international media have said that the devaluation of the RMB is a surprising move, and the depreciation is more than.
1. The Canadian dollar has been hit again.
The Canadian dollar fell another 0.75 points to a low of $76.08 on Tuesday. Because China is a major buyer of commodities and energy, a devaluation would reduce the purchasing power of the renminbi and herald a further slowdown in China’s economy, directly hitting commodity exporters such as Canada, Australia and New Zealand.
As a result, international oil futures prices also fell to $43.16 a barrel in six months on Tuesday morning. The double whammy made the Canadian dollar lower further.
two。. Canadian stock market fell.
Also on concerns about a slowdown in Chinese demand for commodities, the Canadian stock market fell 1 per cent around 10:30 on Tuesday morning, the third day in a row. Among them, the energy sector and raw materials plate fell by more than 2%.
3. The Canadian dollar exchange rate depends more on oil and US dollars.
Although the depreciation of the renminbi has had an impact on the Canadian dollar, Canadian analysts believe that the trend of the Canadian dollar has more to do with the US economy and oil prices. However, neither of these aspects is optimistic, and the weakness of the Canadian dollar will continue for nearly a year or so.
4. There will be another wave of Chinese buying the best part of Canadian property.
Because the RMB continues to depreciate greatly, foreign exchange-denominated overseas assets have become a safe-haven choice for Chinese funds. Now the Canadian dollar has fallen further against the US dollar, giving China the opportunity for the renminbi to enter Canada. People with high assets in China will buy more Canadian real estate, making it a tool to maintain and increase their value.
5. The US dollar will be more popular in the near future.
People who hold large amounts of renminbi will prefer the dollar because of the need for risk aversion and hedging. Spot gold has fallen below the $1100 mark as commodity prices have fallen. The US economy is booming and interest rates are rising significantly. More international hot money will buy US dollars, which may further push up the price of US dollars, while the exchange rate of Canada against the US dollar is not optimistic.
6. The RMB may continue to depreciate by 3% and 5%.
Experts from the bank and financial analysts of china, represented by Zhu Haibin, a china economist at JPMorgan chase, predict that the volatility of the yuan against the dollar may increase to 3%, which means the yuan may depreciate by 3%. But China Merchants Bank thinks the range will be 5%. No analyst has yet put forward more than 5% of the point of view.
7. China’s stock market and housing market fall, hot money may leave China.
Historically, there has been a high correlation between the trend of RMB and A-shares. The depreciation of RMB has led to a decline in the valuation of this asset, which may lead to the weakening of the financial and real estate sectors and drag down the market. On the other hand, overseas hot money is likely to leave the Chinese stock market, aggravating the liquidity tension of A-shares. In the real estate sector, there is also a risk of hot money withdrawal.
8. Study abroad and tourism in Canada will benefit.
Because the depreciation of the RMB against the US dollar benefits countries whose exchange rates are also low. At this level, it is more affordable to study and travel to Canada. Canada has high-quality resources in both areas, which is likely to attract more Chinese students and tourists.