Tim McCracken’s Post

Currently the American dollar holds the crown of the most in demand currency of the world. The second in this regard is Euro as around 20% of foreign exchange reserves of the countries are in this currency. Chinese RMB is at 5th position in terms of foreign exchange reserves that central banks all over the world hold, according to IMF data. Increasing Sino Russian trade and rivalry of the duo with United states pushed their policy makers to use currencies other than dollar for buying and selling goods. The two countries can also use different international platforms of their dominance to start making payments of their trade in their own currencies. BRICS is such a platform for China and Russia to push de-Dollarization further. China with its economic might, status of supply hub and its trade partners in BRICS could increase de-Dollarization. Euro also took ground after its launch and now 19% of foreign exchange reserves of central banks in Euro. The biggest impact of de-Dollarization would be felt in US. Value of the currency could plunge as demand decreases. Apparently no immediate trouble of de-Dollarization is in the offing though willingness of many nations to trade in currency other than dollar has revealed possible decline of use of currency. The response of US to all this would be worth noticing as well.

Great post, here is more information on how we may have played some part in this: "Already, some BRICS members — including Russia and newcomer Iran — have been basically banned from the dollar system. They literally cannot hold a “dollar.” They have no dollar “wallet.” For example, they cannot have a bank account, with a bank in the Federal Reserve clearing system. Other countries, including China, are eager to set up alternative systems, because they suspect that what happened to Russia and Iran could be done to them too. More countries, seeing where this is going, are making sure they have a seat at the table, for business opportunities alone. This could include former US allies such as Saudi Arabia, which joined the BRICS in January." https://lnkd.in/eyk5yvgi

The petrodollar is sinking internationally, while the U.S. government studiously ignores the warning signs. =========================== "Alongside the BRICS de-dollarization plans, the Chinese yuan has officially overtaken the US dollar as the top traded currency in Russia. Indeed, the currency has now surpassed the greenback as the most prominent foreign exchange in Moscow according to a Reuters report. The data shows that the yuan has accounted for more than 42% of currency trades in Russia. Alternatively, that figure outshines the US dollar share of 39.5%. Moreover, the figures show that the trading volumes for the yuan had tripled to reach $385 billion in 2023. ... Over the last year, the global perspective has shifted greatly. Specifically, the BRICS economic alliance has led to increased efforts to diversify its economic perspective. Subsequently, it has greatly affected the US dollar, and the trust in its continued status as a global reserve asset. Now, the BRICS alliance has continued to embrace that message, as the Chinese yuan has overtaken the US Dollar in Russian trade. Indeed, the former has edged out the greenback to be the primary foreign currency traded in Moscow. The development continues to showcase the interconnectivity of the economic alliance, and its embrace of its local currencies. ● Russia’s move away from the US dollar was originally borne out of necessity, derived from Western-imposed sanctions. ● Therefore, many of its BRICS allies rejected the currency alongside it, influenced by fear of relying on a currency that could be weaponized. ● However, that now appears to be a perspective shared globally. Throughout the year, Central Banks across the globe have increased gold acquisition and turned to digital asset developments. This has been a byproduct of US dollar fatigue derived from both its weaponization capability, and its fragility amidst macroeconomic circumstances. Conversely, both Russia and China have increased reliance on each other amid the growing prevalence of the alliance. In 2023, bilateral trade between the countries increased to $240 billion. Moreover, that was an increase of more than 26% from a year prior. This year should see that number only continue to grow." https://lnkd.in/g6jZ82WR

Chinese yuan weakens last week - https://lnkd.in/gGGqeHv2, Dec. 18 (Xinhua) -- Chinese yuan weakened against a basket of currencies last week, according to the China Foreign Exchange Trade System (CFETS). The CFETS yuan exchange rate composite index, which measures the yuan's strength relative to a basket of currencies, lost 0.79 points from the previous week to 98.02, according to the CFETS. The index compares the yuan's value with the value of 24 currencies, including the U.S. dollar, the euro, and the Japanese yen. Last week also saw an index measuring the yuan against the Bank for International Settlements currency basket edge down 0.41 points from the previous week to 102.95. The index measuring the yuan against the Special Drawing Rights basket went down 0.54 points week on week to 93.43. Source

📉 Declining share of US Dollar 📉 In one my recent post, I discussed about the concept of internationalization of currency and the efforts by the Reserve Bank of India (RBI) to advance this agenda. But India is not alone in its pursuit of currency internationalization; many other countries are also intensifying their efforts. This trend is evident from the latest data published by the International Monetary Fund’s Currency Composition of Official Foreign Exchange Reserves (COFER). The COFER data reveals a gradual decline in the U.S. dollar’s share of allocated foreign reserves held by central banks and governments. Interestingly, this decrease in the dominance of the USD has not been offset by an increase in the shares of other traditional global currencies such as the Euro, Yen, or Pound. Instead, there has been a noticeable rise in the share of “non-traditional” reserve currencies. These include the Australian Dollar, Canadian Dollar, Chinese Renminbi, South Korean Won, Singaporean Dollar, and the Nordic currencies. This shift signifies a growing diversification in global foreign exchange reserves, reflecting broader geopolitical and economic trends. Source : International Monetary Fund #economy #finance #IMF #currencies

Key Depreciating Currencies Against the USD The Bank for International Settlements (BIS) has recently released updated data on currency depreciation against the US dollar from FY13 to the present. This chart highlights the significant currency movements in key global economies. Key Insights: Turkish Lira (TRY): The lira continues to lead with a depreciation of 1,702.6% against the USD, reflecting persistent economic challenges. Iranian Rial (IRR) and Russian Ruble (RUB): These currencies have seen substantial depreciations of 242.6% and 212.9%, respectively, influenced by geopolitical tensions and internal economic policies. Indian Rupee (INR): Notably, the rupee has depreciated by 63.7%, a significant figure given India's economic stature as a rapidly growing market. Chinese Yuan (CNY): In contrast, the yuan has shown relatively modest depreciation of 14.4%, indicative of China’s managed exchange rate policy. Japanese Yen (JPY): The yen also shows significant depreciation of 82.9%, reflecting Japan's currency movements global economic shifts. #CurrencyDepreciation #FinancialMarkets #EconomicInsights #BIS #GlobalEconomy #InvestmentTrends

The US dollar is put under pressure as BRICS members China and Saudi Arabia are advancing in the de-dollarization motives. BRICS countries China and Saudi Arabia signed a trade agreement worth $7 billion on Monday kick-starting the prime de-dollarization process. China and Saudi Arabia’s deal is a currency swap that favors their local currencies the Chinese Yuan and the Riyal. The trade agreement is valid for three years and both the countries will settle trade in local currencies up to 50 billion Chinese Yuan or 26 billion Saudi Riyals. https://lnkd.in/eki4Pm2Z

Asian currencies saw a slight uptick as market bets on U.S. interest rate cuts weakened the dollar. This led to modest gains for most regional currencies, although the Taiwanese dollar (TWD) and the Chinese yuan (CNY) underperformed. The anticipation of reduced U.S. rates dampened the dollar's strength, providing some relief to other currencies. However, ongoing economic concerns in Taiwan and China, including sluggish growth and trade challenges, continued to weigh on TWD and CNY, preventing them from capitalizing on the broader regional trend. JKV Global Markets Ltd. www.Jkvglobal.com #jkvglobal #forextrading #tradingcompany #forex #forextrader #forextrading #forexsignals #forexlifestyle #forexlife #forexmarket #forexsignal #forextrade #tradeforex #forexprofit #forexmoney #forexeducation #forexsignalservice #india #uae #forexnews

The US dollar is put under pressure as BRICS members China and Saudi Arabia are advancing in the de-dollarization motives. BRICS countries China and Saudi Arabia signed a trade agreement worth $7 billion on Monday kick-starting the prime de-dollarization process. China and Saudi Arabia’s deal is a currency swap that favors their local currencies the Chinese Yuan and the Riyal. The trade agreement is valid for three years and both the countries will settle trade in local currencies up to 50 billion Chinese Yuan or 26 billion Saudi Riyals. According to CEIC and Fed data, Chinese treasury holdings are now down to $778.1 billion, 41% below the 2013 peak of $1.316 trillion. Saudi holdings are currently at $117.1 billion, down 36.4% from the 2020 peak of $184 billion. https://lnkd.in/dtV6sXhG

Asian currencies slipped as markets awaited the Federal Reserve's crucial meeting, following a landmark rate hike by the Bank of Japan. Despite BOJ's modest 0.1% increase, the yen weakened sharply, reaching 150 against the dollar. The Australian dollar retreated after the Reserve Bank of Australia struck a less aggressive tone. The dollar edged towards a two-week high ahead of the Fed meeting, keeping pressure on most Asian currencies. The South Korean won, Singapore dollar, and Indian rupee dipped, while the Chinese yuan hovered near 7.2 against the dollar amidst concerns about China's economic outlook. #Asia #forex #forextrading #RBA