In The Context Of The Financial Crisis, Exchange Rate, Interest Rate And Stock Price Effects Associated

Stock index is the national economy's weatherglass, which can flexibly reflect the entity economy's subtle change. While the exchange rate is international currency's price, the movement in exchange rates reflects the change of monetary international purchasing power, also reflects the change of domestic economic fundamentals. Interest rate is the interest level of unit currency in unit time; the change in interest rates reflects monetary policy's change. Exchange rate, interest rate and share price is important financial submarket, which is an important index that can reflect the nation economic strength and monetary policy. There are inner link between them, the fluctuation of exchange rates, interest rate can cause share price fluctuations, and vice versa.Effects associated with the stock exchange, has been the focus of academia and the investment community for a long time. Correlation effect contains in the correlation and causality, at different times, the performance of different countries in the sample is all somewhat different. This research focuses on the financial crisis, during 2007 to June 2009, China's exchange rate, interest rate and stock index on the association effect, i.e. relevant to what extent, and further how the influence between them. In this paper, the exchange rate, interest rate and stock price effects associated with literature conclusions, its causes and effects associated with the performance forms of a change in the distribution of scientific perspective, switch variables detailed perspective, the use of Western economics, international economic and behavioral finance point of view, respectively, illustrates the effect of exchange rate and stock price associated causes of exchange rate system based on different mechanisms for different interest rates and stock market system and compares the different exchange rates, interest rates and stock price performance form.This article focuses on theoretical analysis, using correlation analysis, Granger causality tests, error correction model, impulse response function measurement models such as the RMB exchange rate and stock prices to gradually expand the dynamic relationship between the empirical analyses. We consider the background of the financial crisis, select the main variable is the exchange rate of RMB against the U.S. dollar, the Shanghai Composite Index, there are other two research variables: one-year deposit rate and the U.S. Dow Jones Industrial Average index. Through the establishment of an empirical analysis of the model obtained after the financial crisis of the variables associated with the special effects, we get the following main conclusions:firstly, China's financial market, the relationship between exchange rate and stock prices under the impact of the financial crisis, meets the traditional theory of interpretation that the exchange rate changes lead to changes in stock prices; secondly, stock price movements in financial markets have no effect on the exchange rate; thirdly, the U.S. stock market volatility on the stock market's short-term impact of the intensity is greater than the impact of the RMB exchange rate on the stock market, and the U.S. stock market and the China Stock Market between the linkage effects. That the financial crisis the stock market can adversely affect China; fourthly, interest rate adjustments have little effect on stock price, but it has short-term impact on the exchange rate. In response to these conclusions, this paper discusses multi-level possibilities according to China's financial market. We still research the stock market effect of exchange rate movements, making some suggestions for investors to use of the exchange rate and stock price effects associated with trends in investments. Finally, in policy recommendations part, combination of financial crisis, the exchange rate, interest rate and stock price effects associated with the proposal put forward in three areas:to further promote the reform of RMB exchange rate formation mechanism, accelerating the development of the foreign exchange market; building international capital flows to the stock market dynamic monitoring and early warning mechanisms; developing standardized securities market in order to eliminate the negative impact of exchange rate changes.