The US dollar has emerged victorious among its competitors, driving the currency dominance game to new levels. The USD has managed to gain prominence against global contenders, defeating competitors like the Yuan and Ruble in its wake.
However, the ongoing USD surge spell might get jinxed sooner or later as competitors around the world are inching towards magnifying the ditching dollar narrative. With ballooning US debt metrics, credit scores, and inflationary pressure, how long would one assume USD’s dominance to stay unscarred?
Also Read: What’s Happening Between the US Dollar & Japanese Yen in 2024?
US Dollar’s Rise, Zenith, and Fall
Source: stock.adobe.com
The US dollar has emerged as one of the strongest currencies to lead the global financial space. The USD has been performing its best since the start of 2024, despite encountering eroding economic narratives. Per NYT, every major currency has fallen against the USD. Nearly 150 global currencies have weakened against the dollar, bolstering its stance a notch.
The dollar’s recent surge might be attributed to the current Federal Reserve outlook, which plays an instrumental role in delivering support to the USD. High Fed rates help US assets appear more lucrative to investors, driving in more value and a surge in their price.
However, the current positive change in dollar dynamics might not be enough to sustain the dollar drive, as geopolitical tensions continue to cause distress for the US economy as a whole.
China and Russia Lead Economic Growth Even After Ditching USD
China and Russia are pioneering the de-dollarization narrative, as both countries have decided not to explore the USD for foreign trade. Both nations have successfully executed $260 billion worth of trade without using the dollar, denoting their strength and meticulous stance on the rising de-dollarization aspect.
China is also expecting to broaden its horizons after ditching USD usage. The nation is consistently working towards doubling its GDP to counter the US in all its antics.
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Similarly, Russia has also noted a consistent increase in its GDP, reporting a 5.4% increase in Q1 2024. Both nations have meticulously carved stellar backups that permit them to explore alternatives other than USD to strike powerful global alliances. If this ideology gains momentum, it could severely injure the USD’s demand, triggering a death spiral for the US dollar to encounter in the near future.