After The Revaluation Rate Expectations And Study On The Relationship Between The Stock Price In Our Country

Since the floating exchange rate system is used by various countries, under the floating exchange rate system, the influence of foreign exchange market’s free variation on a country’s macro-economic variable as well as other capital market has received the attention from the academic world. As an important component of a country’s capital market, the stock market has been fluctuating a lot under the influence of international circulation of capital scale’s sharp growth in the recent20years. As the "weather forecast " of a country’s economics, the stock market, to a certain extent, reveals the change of the rate between domestic and foreign currency. In an open economy, the exchange rate, a link between stock markets of different counties, is strongly associated with the stock market. However, based on researches from different countries and time, the association is not absolute. The academic world has not reached the consensus, due to the specific situations of a country being studied as well as the restrains of tradition research methods.Under the background of China’s exchange reform in2005. this article introduces the function of exchange rate expectation from the flow-oriented theory and the stock-oriented theory point of views. By analyzing the function mechanism of our country’ stock price and the exchange rate expectation from current-account and capital-account, This article studies the influence of exchange rate expectation on the stock price via different intermediary variables.This article’s main conclusions are as follows:The firm’s exchange rate exposure and the enterprise’s overseas sales are positively related. Exchange rate expectation granger cause the fluctuation of stock price. Exchange rate expectation negatively influences the stock price through the current-account. However, due to the fact that the influence mechanism of capital-account is too strong after the exchange reform, the exchange rate expectation causes the rise of stock price as a whole.