The Impact Of Sino-US Trade Frictions On The Fluctuation Of RMB Exchange Rate

In March 2018,the United States to China put forward by strengthening bilateral talks,negotiate,refuse to deal with claims of Sino-us trade disputes,regardless of the pattern of world development and international economic order,arbitrary wave to stick "America first" for the purpose of tariffs,china-us trade dispute intensified,the RMB exchange rate market also presents obvious vibration.This paper first reviews and comments the relevant research literature.Then,it defines the trade friction,briefly expounds the development status and causes of the trade friction between China and the United States,meanwhile,sorts out the main exchange rate determination theories,and discusses the transmission mechanism of the trade friction between China and the United States to the RMB exchange rate fluctuation.Empirical research part,the paper selected solstice on 19 August 2017 in August,2019,19 the events of 144 Sino-us trade friction,using analysis method combined get 44 events period as sample event,starting from the onshore and offshore RMB markets,select 3 solstice in January 2017 on August 31,2019 different foreign exchange market of RMB spot and forward exchange rate and the spreads of China and the United States,degree of data,and introduce the Sino-us trade friction variable EGARCH model,trying to depict trade friction impact on the different period of RMB exchange rate fluctuations.The theoretical analysis shows that the abnormal fluctuation of the exchange rate market and the occurrence of Sino-us trade friction events have remarkable synchronism.The transmission channels of trade friction on exchange rate can be divided into three aspects: market signal channel,government target channel and asset portfolio channel.They can be directly transmitted by influencing the expectation of foreign exchange market participants,changing the level of government welfare and restructuring the holding ratio of foreign exchange investors' asset portfolios.The regression results of the empirical model show that: first,the Sino-us trade friction incident has caused significant abnormal fluctuations in the RMB exchange rate,which may further cause the instability of the international exchange rate market;Second,different state,the foreign exchange market in the face of Sino-us trade friction,spot,the deadline forward exchange rate volatility response direction consistent,but the degree of response differences,the two countries trade game exacerbated the offshore and onshore forward exchange rate fluctuations at sight,and the impact of the onshore forwards six months the positive effect is greater than the RMB exchange rate fluctuations on the positive effect of the offshore RMB exchange rate fluctuations at sight;Third,the positive impact of trade friction shock on the onshore forward exchange rate volatility is inconsistent in different terms,and the longer the delivery term,the more significant the impact effect.Therefore,as China's capital account liberalization and marketization of exchange rate coordination,currency speculators and central bank policy makers should not only focus on Sino-us trade friction in decision-making of prices and the impact of the fluctuation of RMB exchange rate effect,also to the offshore and onshore foreign exchange market under different delivery deadline of RMB exchange rate fluctuations,which not only can better stability of RMB exchange rate and reduce the risk of foreign exchange market,and the optimal allocation of assets for investors and risk aversion to provide certain reference value.