Will the Reduction of FED do good to our economy?

The US central bank has lowered interest rates for the first time in more than four years with a bigger than usual cut. The Federal Reserve reduced the target for its key lending rate by 0.5 percentage points, to the range of 4.75%-5%. The move by the Fed follows cuts by other central banks, including those in Europe, the UK, and Canada and a reduction was widely expected.

from BBC real news

What will do to our business?

Reduction will weaken US currency, creating pressure for CNY appreciation. Products value by Yuan will become more expensive (exchange rate from USD:CNY=1:7.2 June to USD:CNY=1:7 Sep), this will make exporting less profitable.

Fluctuation on raw materials especially metal and oil will increase demands, might increase price as well. Creating pressure on paying more for materials not adding costs.

Capitals run to the new market especially China, will bring more investment chances for those who seek to update productivity and globalize.

Be caution of speculation.

Interest rate from high to low will increase loans and consumptions, typically like before money flood into stock, bond, estate markets and making rise. Not like before, main markets for consumption have been cool down over long time, not foreseeable any economy bubbles will happen and breach.

The Reduction was intended to stimulate economy growth of the US, hoping also recovery global demands, this situation if overall needs are increasing, the rising cost of currency exchange and material price were able to offset by quantity to balance profits. The chances are also good for other industrial entities, Chinese manufacturers still see constructing themself as priority to become exceptional between competitions.