Published November 26, 2023
When BRICS announced this year that they plan to dethrone the US dollar from the global reserve currency status, nobody took their ideals seriously. The alliance has now walked the talk and slowly changed the global financial dynamics one step at a time. Though the pace of de-dollarization is slow, BRICS are marching on the path of ditching the US dollar and putting their local currencies forward.
Read here to know how many sectors in the US will be affected if BRICS stops using the dollar for trade. The traditional financial system will be altered leading the way to the new world order dominated by developing countries. The development will put the US dollar under pressure if countries begin to use local currencies for cross-border transactions.
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SOURCE: www.watcher.guru
RELATED: 3 reasons countries around the world want to break up with the dollar
A few key outside factors are chipping away at the US dollar’s dominance in global trade. Getty Images
Published November 26, 2027
- The US dollar has been the world’s reserve currency for decades, but its dominance is fading.
- Sanctions against Russia have spurred other countries into considering backup currencies for trade.
- US monetary policies, the strong USD, and structural shift in the global oil trade also contribute.
The dollar has been the world’s reserve currency since World War II, but a combination of political and economic reasons is slowly chipping away at its supremacy.
Nearly 60% of international reserves are held in dollar-denominated assets, according to the International Monetary Fund. The dollar is also the most widely used currency for trade.
Now, Western-led sanctions against Russia related to its invasion of Ukraine are making other countries wary of potential consequences of crossing Washington.
Some, such as Brazil, Argentina, Bangladesh, and India, are lining up backup currencies and assets — such as the Chinese yuan and bitcoin — for trade and payments.
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SOURCE: www.markets.businessinsider.com
RELATED: US Dollar Forecast: Growth and Inflation to Extend the USD Sell-off?
Published November 26, 2023
US DOLLAR WEEKLY FORECAST: BEARISH
- Risk events ahead: US GDP (2nd estimate) and US PCE inflation
- US Treasury yields rise ahead of sizeable government auction
- US Dollar basket tests crucial long-term trend indicator
- Implied rate cuts ease slightly from 4 full rate cuts in 2024 to 3
DOLLAR MAY DRIFT LOWER ALONGSIDE INCOMING ECONOMIC DATA
The dollar has been moving lower, in a similar fashion to US yields and US economic data as the world’s largest economy appears to be feeling the effects of tight financial conditions. Labour data has eased since the October NFP report, retail sales and CPI data dropped and overall sentiment data has been revised lower too.
In the coming week, High impact US data includes the second estimate of Q3 GDP as well as US Personal Consumption Expenditure (PCE) data – the Fed’s preferred measure of inflation.
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SOURCE: www.dailyfx.com
