GlobalCurrencyThe war has begun, and the dollar is the most dominant in the worldReserve currency, facing a new round of challenges. The US dollar has been volatile since October, and has fallen off a cliff since November, even falling below the key 103 support level. All this is not related to the Fed'sCut interest ratesWhat about it?As it turned out, this was not the case. Although the United States FederalInterest ratesIt remains at 525%~5.5% high level, thoughU.S. dollar indexThe persistence of the dollar suggests that the dollar is experiencing a global responseCurrencyThe war may enter the end of total defeat.
CurrencyGloballyEconomyThe U.S. dollar plays a vital role in the system, and the U.S. dollar is the world's most dominant oneReserve currency, with wide acceptance and circulation, inInternationalandFinancePlays an important role in trading. This makes the United States inInternationalFinanceThe market has a huge advantage and can passCurrencywar to maximize self-interest. However, in recent years, globallyEconomyThe landscape has changed, and countries continue to push for de-dollarization, leading to the USCurrencyThe war is much less effective than before. Russia became a prime example.
Since 2014, Russia has actively aggravated US debt and promoted the process of de-dollarization. Especially in the ** with Europe, Russia prefers to use the euro as the main settlementCurrency, and Asian countries, China and China also promote the use of local currencies or renminbi for settlement. This trend of de-dollarization was initiated against the United StatesCurrencyThe war had a direct impact.
As a key step in countering the United States, the United States kicked Russia out of the SWIFT system last year, restricting its use of the dollar in **. This move led to a timeRussian rublesThe exchange rate is substantial**. However, with the intervention of the Central Bank of Russia,rublesQuickly ** and became global last yearCurrencyIt is rare to achieve positive growthCurrency。This means,rublesIn with the dollarCurrencyWon a game first.
Russia's approach has lessons for other countries. First of all, Russia has increased its cooperation with other countries, especially with China and Asian countries. This has allowed Russia to use more of its own currency for settlements and reduce its dependence on the US dollar. Secondly, Russia actively promotes bilateral agreements with other countriesCurrencySwap agreements further strengthen the local currencyInternationalStatus. In this way, even in the face of dollar restrictions, Russia will still be able to conduct normal ** exchanges with other countries.
Nowadays, more and more countries are beginning to adopt a similar strategy, through the use of US debt, strengthening the local currencyInternationaland other ways to promote de-dollarization. This makes the United StatesCurrencyThe war is not as effective as it used to be on a global scale. Therefore, it can be expectedU.S. dollar indexwill continue**.
The United States to the globeCurrencyThe battle was carried out for 10 years. SinceSubprime mortgage crisisSince the outbreak, the United States has implemented multiple rounds of quantitative easing, through large-scale purchasesTreasury bondsand othersFinanceassets to increaseCurrency**, stimulusEconomyActivity. This led to a massive influx of dollars into the global market for the follow-upCurrencyThe foundation was laid.
And with the outbreak of the epidemic, the worldEconomyHit like never before, the U.S. has stepped up furtherCurrency** to copeEconomyRecession risk. This move further exacerbated the US dollar in the global marketLiquidity, making the dollar's position in the world more prominent.
However, in March last year, the United States suddenly implemented a large interest rate hike, marking a round of global orientationCurrencyThe beginning of the war. This move has sparked a global market**, and many emerging market countries have been hit hard. The goal of the United States is to improve by improvingInterest ratesAttract capital back to the country and weaken the competitiveness of other countries. However, due to the globalEconomyThe pattern has changed, and countries continue to promote de-dollarization, initiated by the United StatesCurrencyThe war is much less effective than before.
CurrentCurrencyIn the context of the war,U.S. dollar indexThe continuation of ** is almost inevitable. The global hegemony of the US dollar is being challenged as more and more countries push for de-dollarization, and the United StatesCurrencyThe war is much less effective than before.
Although I understand your point of view, there are a few issues that need to be pointed out. First, you mentioned the Fed'sCut interest ratespolicy, actuallyCut interest ratesusually leads to the home countryCurrencyDepreciate. Hence the Federal ReserveCut interest ratesAnd not the reason for the dollar**. In fact, the recent dollar** can be attributed to a number of factors, including global markets against the United StatesEconomyConcerns about the situation and the appetite of global investors for risky assets. Secondly,CurrencyWar is a complex concept, and it is difficult to explain market movements in terms of simple linear relationships. Different countriesCurrencyPolicy andEconomyThe situation will have an impact on the exchange rate. And,CurrencyThe concept of war itself is also controversial, since exchange rate policies between countries are often motivated by their own interestsEconomyInterests are considered. Finally, market movements are often the result of multiple factors and cannot be simply attributed to a single factor. Therefore, the interpretation of the movement of the US dollar should take into account more factors and conduct a more comprehensive analysis.