The US dollar exchange rate fell to 6.3, and export sellers exclaimed!

For the majority of export sellers, the exchange rate issue has always been the focus of attention. Yesterday, the RMB exchange rate "fluctuated a little bit", and a large number of export sellers' "hearts trembled three times". Exchange rate fluctuations have always been closely related to the United States. It is reported that the inflation phenomenon in the United States is now very serious. Data shows that under high prices, the United States has also erupted in the largest "resignation wave" in 20 years, with a maximum of 4.3 million resignations in one month. In addition to resignations, more than 100,000 workers in the United States are on strike under the organization of trade unions, demanding higher wages and benefits.

Due to inflation in the United States, many export sellers are having a hard time. It is reported that under the influence of inflation and platform policies in the United States, a large number of export distribution companies have gone bankrupt this year. A group of cross-border people who just entered the industry at the beginning of the year not only did not make any money, but suffered terrible losses.

"There are always leeks, and they grow new every year. If you want to avoid being cut, you have to be a prince. This year's goal is to make 1 million, but we are still 1.6 million short," said a cross-border seller.

The US dollar exchange rate fell below multiple thresholds, and the cross-border export industry was "wowed"

On October 20, the onshore RMB exchange rate against the US dollar opened 100 points higher, breaking through the 6.39 mark, while the offshore RMB exchange rate against the US dollar fluctuated around 6.38. As of 9:32, the onshore and offshore RMB exchange rates against the US dollar were 6.3893 and 6.3829 respectively.

Yesterday, the offshore RMB exchange rate broke through the 6.40 mark during the day, appreciating nearly 300 points during the day, breaking through the five levels of 6.42, 6.41, 6.40, 6.39 and 6.38 in succession, rising to 6.3780, a new high since mid-June. The onshore RMB also broke through 6.41 during the day , both of which were new highs since June this year.

For export sellers who are suffering from multiple cost squeezes, they have started to discuss this news since yesterday. Summarizing the public voices, we can see that some people have question marks on their faces, and they haven't reacted yet that the exchange rate has become this number:

A: What's wrong with the exchange rate? It has fallen below 6.4 since yesterday afternoon and is going lower and lower. I don't even dare to convert it into RMB. What's going on?

B: The offshore RMB rose above 6.38 against the U.S. dollar, up 0.7% on the day, the second largest single-day increase this year?

C: The RMB exchange rate is currently surging. What’s going on? Are there any new moves by the Federal Reserve?

D: I am shocked by today’s exchange rate. I feel like I have difficulty breathing just by looking at the exchange rate... Don’t be like this. I can’t afford it.

E: The US dollar exchange rate was 6.38 yesterday and 6.37 today. What is going on?

Some people, under the fluctuation of exchange rates, think of how sad this year has been and can't help but feel sad:

A: The cost and freight are rising rapidly, but the exchange rate has fallen so much that I feel like I have to carry a bucket at any minute when I go to work every day.

B: The US dollar exchange rate, rising raw material prices, and skyrocketing freight rates ... this year is really unbearable to watch.

C: As the U.S. dollar exchange rate continues to fall, the Taobao thinking of cross-border e-commerce sellers has become seriously inward-looking, which is basically a rhythm of self-destruction.

D: Two days ago, the exchange rate was still 6.42. I was still holding out hope and wanted to wait before exchanging. But now it has become 6.38. I think I am really lucky.

Of course, almost everyone lamented that once the exchange rate fluctuated, their own money also began to fluctuate, and "I made money but my total assets decreased" became their consensus.

A cross-border seller said that freight costs have skyrocketed, exchange rates have plummeted , domestic power outages have occurred, and prices abroad have been spiraling low , but his goods still cannot be shipped out . It would be good if he could just break even this year.

Coincidentally, another cross-border seller also said that now his identity has officially become a philanthropist. He no longer thinks about making money . The one-day exchange rate deduction is enough for a month's living expenses.

"I only drive a Tesla, but the exchange rate is worth the price of a Porsche. I feel like I have a thousand horses running wild in my heart."

In fact, in addition to the US dollar exchange rate, the Japanese yen exchange rate is also fluctuating. As of press time, the Japanese yen exchange rate against the RMB has fallen to 0.0558. The Japanese yen exchange rate continues to fall. Sellers on the Japanese site are probably crying in the toilet.

A seller who mainly operates on the Japanese site said that the recent yen exchange rate is almost catching up with that in 2014, and nearly 200,000 yuan of payment for goods has evaporated.

Another operator of large items on the Japanese site also said that this year's performance was far worse than last year, and their boss had given up on making money and was just trying to get through this year.

Sharing the same sentiment as the cross-border traders on the Japanese site, a foreign trade export seller on a certain American site also said that the first thing he does when he goes to work every day is to wait for the foreign exchange market to open and pray that everything will be fine.

How will the exchange rate trend in the future? How can export sellers avoid exchange losses?

From yesterday to today, the discussion on exchange rates continues. Tao Chuan, chief macro analyst at Soochow Securities, believes that the "stagnation" of domestic US dollar liquidity is an important reason for the steady rise of the RMB against the US dollar. He said that liquidity indicators show that in September 2021, the relative abundance of domestic US dollar liquidity has reached a new high since the exchange rate reform in August 2015. Some economists have officially warned that the US economy may be re-entering a recession, and its severity may be as severe as during the 2008 financial crisis.

The majority of export sellers are very concerned about the subsequent trend of the exchange rate . Many industry insiders said that in the short term, the market has a strong willingness to convert foreign exchange into RMB at high prices, and the RMB exchange rate against the US dollar may still have room to rise.

CICC Macro's latest research report predicts that tight short-term liquidity and strong export growth will continue to support the RMB exchange rate. Before the US dollar liquidity is actually tightened, the RMB will most likely fluctuate within a range .

According to Cailianshe, the market demand for foreign exchange settlement has been strong recently, and some institutions in the market have taken advantage of the trend. The RMB is under certain appreciation pressure, but the overall upward space may be suppressed. It is expected that the onshore RMB exchange rate against the US dollar will operate in the range of 6.39-6.43 in the short term .

Exchange rate fluctuations also mean that the profits of export sellers will be affected. In this case, many large exporters are also looking for various ways to reduce exchange losses.

Damaize Zebao said that the company's export sales revenue accounts for more than 90% of its main business revenue . Precision hardware products are exported by the company itself, and the settlement currency is mainly US dollars. Consumer electronic products are mainly sold directly to the United States, Europe, Japan and other countries and regions through the Amazon platform, and are mainly settled in currencies such as US dollars, euros, and yen. If the renminbi appreciates in the future, exchange losses will occur, which will in turn affect the company's net profit. The company will increase research on the exchange rate market, reasonably determine export sales quotations and export contract signing, and make full use of timely settlement of foreign exchange, foreign exchange derivatives and other methods and tools to avoid and prevent exchange rate risks and reduce the adverse effects of exchange gains and losses on operating performance.

Anker Innovations, a big seller, also said that the company uses two settlement modes, US dollars and RMB, for finished product purchases. The impact of exchange rate fluctuations on the company's operating performance is mainly reflected in the impact on the price competitiveness of product exports and product procurement costs. If the company fails to take effective measures to deal with exchange rate risks, it may have a certain adverse impact on the company's profitability.

In order to reduce the impact of exchange rate fluctuations, the company carried out foreign exchange hedging business during the reporting period, which effectively offset some of the adverse effects of exchange rate fluctuations. In the future, the company will continue to strengthen the analysis and research of exchange rate changes, actively manage foreign exchange risks, adhere to the "risk neutral" principle, select appropriate currency quotations, balance foreign currency receipts and payments, and comprehensively adopt foreign exchange hedging and other methods to reduce the adverse effects that may be caused by exchange rate fluctuations.

This year is so difficult, all the distribution companies are going bankrupt!

In fact, in addition to exchange rate issues, export sellers' profits also face various forms of cost squeezes.

For factory sellers, many factories reported this year that the pay was low and the work was heavy, and the sense of insecurity was soaring.

A production-oriented foreign trade factory said that the company's average profit is about 15%, while many production-oriented enterprises in the industry only have 3-5 points. The exchange rate loses some money, and the skyrocketing raw material prices lose another bit of money. The rising freight costs, power and production restrictions, and customer demands for price cuts (most of which are still OEM models) continue to reduce the profit margin.

Many factories already have slim profits. If they had only started to enter the Amazon market in the past two years, the result might have been "making things even worse for already poor families."

It is reported that many factory sellers listened to the advice of training institutions and only started doing business on Amazon this year. Due to being too optimistic, they had a pile of goods worth millions or even tens of millions, which led to tight cash flow. Not only did their Amazon business fail to take off, but it also dragged down their own B-side business.

"My friend runs a factory, mainly in the toy category. He started selling on Amazon at the beginning of this year, but his store has been in a half-dead state. Some time ago, the Amazon operations manager of the company resigned, leaving behind a pile of FBA inventory in the warehouse."

Sometimes, the loss may be within a controllable range and there may be room for a comeback, but if the company goes bankrupt, it will be more difficult for these sellers to turn around. But the reality is that many export sellers declare bankruptcy before they have figured out the rules of platforms such as Amazon.

" Many sellers in Shenzhen have been affected by Amazon's account suspension, and sellers in Zhejiang are not immune. Many companies engaged in distribution in Hangzhou have closed down. Industry insiders said that a large number of Amazon distribution companies have died this year, and most of those who entered the industry at the beginning of the year have been harvested.

"When your factory also starts to do business with Amazon, you will know that it is already a bloodbath." Industry insiders said that an industry that seems to be booming actually contains a great crisis. Cross-border e-commerce exports are no longer as easy as before. Amazon, as a world-renowned large platform, is even more difficult to do. This does not mean that Amazon does not make money, but there are too many uncontrollable factors and the risks are too high. Many people are turned away every year. I have never seen other e-commerce peers live in such fear. Men are prone to baldness, and women are prone to endocrine disorders...

Amazon's inventory restrictions and US logistics congestion have made many Amazon sellers face out-of-stock problems. According to Marketplace Pulse's research , 75% of the top 100,000 sellers on Amazon store most of their inventory in FBA.

It is reported that Amazon is an asset-heavy e-commerce model. The status of many Amazon employees is often: a batch of goods is in the Amazon warehouse, a batch of goods is on the road, and a batch of goods is made in the factory. If the product is good, they have to stock up; if it is not good, they have to promote it, evaluate it, and test it continuously. The store may be closed at any time. Some Amazon products are still losing money while selling them as logistics costs rise.

"My friends all suffered losses in this way. At the beginning, I always thought I was awesome.

After they got in, they found that they had lost too much money. In the end, some people had to sell their shops to make a living. "Losing money has become the norm for many Amazon employees. "You can't be impatient with cross-border e-commerce. You have to endure it slowly. It's normal to lose some money at the beginning. After a long time, it will naturally go bankrupt." Under the sudden increase in pressure, many Amazon employees have been turned into joke tellers.

In the face of the current situation where the entire cross-border environment is not very friendly, survival has become the consensus of cross-border people. "In recent months, we no longer compete for rankings, maintain a balance between profit and loss, and take survival as the top priority!"

For export sellers, those who make money in the end must be smart and honest people, so the majority of export sellers should not be too anxious when facing issues such as exchange rate fluctuations.

There is another wave of strikes in the United States, more than 100,000 American workers are going on strike

In recent years, the global economy has been facing changes in trade policies of major economies, deterioration of local economic environment and geopolitical tensions. As a major global economy, major consumer market and core link of the world industrial chain, the export restrictions, tariff barriers and other protective trade policies adopted by the United States may have a significant adverse impact on many industries around the world.

Inflation in the United States is now very serious, which has also caused a series of adverse effects on the United States itself.

“America is such an amazing country.”

The impact of the new coronavirus pandemic on the United States has been very large, and now there is a supply chain crisis and inflation has prompted American workers to begin strike actions.

According to foreign media reports, a wave of strikes is sweeping the United States, with more than 100,000 American workers going on strike in October or threatening to go on strike.

Last Thursday, 10,000 workers at farm equipment maker John Deere walked off the job over wages and working conditions, the largest strike in the U.S. since 2019.

Meanwhile, many US television and film studios were forced to shut down as 60,000 film and crew workers walked off the job, in what would be the largest labor strike in Hollywood since World War II.

In addition, more than 24,000 workers in California and Oregon began striking after pay negotiations with private hospital group Kaiser Permanente reached an impasse.

About 6,500 lecturers in California are also on the brink of striking.

Thousands of other workers have walked off the job in October, including 700 nurses in Massachusetts, 2,000 New York hospital workers and 1,400 Kellogg factory workers in Michigan, Nebraska, Pennsylvania and Tennessee.

The wave of strikes was prompted directly by workers’ demands for better rights during the pandemic, but employers are also finding themselves in a tough spot as they have to raise the wages of minimum wage earners due to labor shortages.

At least 176 strikes have been launched so far this year, 17 of which took place in October, according to Cornell University's Labor Action Tracker. A record 2.9% of the workforce walked off the job in August, equivalent to 4.3 million people.

"The workers are striking for better pay and a better life," Liz Shuler, president of the AFL-CIO , the largest U.S. labor federation , said at a Saab news conference last week.

In addition, some transport companies, including FedEx, have received strike notices from employees, who said: "The company has failed to provide job security during the pandemic and there is no fair pay, leaving them with no choice but to take legal industrial action to break the deadlock before the Christmas demand surge."

The employees also said they would take strike action on Thursday if the company failed to offer a fair solution.

Strikes exacerbate U.S. supply chain crisis and inflation

The strike has a great impact on the United States. The supply chain crisis has not yet been resolved, but with the workers' strike, the supply chain crisis in the United States has become even more tense. In addition, the strike has also exacerbated inflation in the United States.

According to foreign media reports, the current congestion and blockage in the production system has affected various sectors, services and commodities, and electronic products, medicines, household goods, meat and automobiles have all experienced supply difficulties.

It is understood that many supermarkets in the United States are now experiencing shortages of supplies, including food, beverages, clothing and daily necessities. Many supermarket shelves are empty, and some stores said they are "uncertain when they can be restocked."

As prices soar in the United States, many American consumers are also protesting. A U.S. footwear industry group representing nearly 500 companies said on Tuesday that the price of children's shoes in the United States has soared to the highest level in 70 years, and urged U.S. President Biden to address the problem. The group said: "Poor and working-class families have spent dramatically more on children's shoes. Children's shoes are among the products with the highest tariffs of all products."

As consumer demand for goods in short supply increases, shipping costs for goods from China to the United States and Europe have soared, and due to transportation difficulties and product shortages, end consumers will pay high prices when they purchase these goods.

However, the epidemic in the United States has not yet been effectively controlled. Coupled with the supply chain crisis, it is expected that the shortage of goods in US supermarkets will not be alleviated in the short term.

In addition, American workers can also receive unemployment benefits when they go on strike, and they consume goods without producing them, which will also exacerbate inflation in the U.S. Some foreign media also said that Biden ’s $1.9 trillion American rescue plan is also exacerbating inflation, but this impact is short-term.

Today, the epidemic is still raging in the United States. From the beginning of the epidemic to now, the United States' epidemic prevention measures have not been effective. The safety of workers is not guaranteed, and their wages and benefits cannot keep up. This is the main reason for the strike of American workers.

One American worker said: “We sacrifice time with our families, we miss ball games with our kids, dinners with our kids, weddings, all those hours working, and we’re not getting rewarded…”

Some netizens joked that it was embarrassing to work so hard in the United States but not be able to buy toilet paper (toilet paper is in serious shortage in the United States) ...

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