Last month, the US dollar index sank below its critical 100-level benchmark, amid reports about the greenback being on the “verge of a decisive breakdown.”
The US currency has dipped to a one-week low against a basket of currencies in the aftermath of the market’s focus turning to America’s soon-to-be-published inflation data.
Media reports said that the so-called US dollar index (USDX) – a measure of the greenback’s value relative to a batch of foreign currencies – “last stood at 101.98, languishing near Friday’s low of 101.73.”
US inflation data is due to be released on Thursday, amid speculation that the country’s core inflation soared by 4.7% on an annual basis last month. Separate reports also suggested that the US Federal Reserve “may need to keep rates higher for longer” in light of a “still-tight labor market.”
The current fall of the greenback comes after the USDX plummeted below its important 100 level in mid-July to a low of 99.47, prompting an American business news outlet to report that the US dollar is “on the verge of a decisive breakdown that would reverse much of the gains the currency enjoyed over the past two years.”
The outlet cited senior analyst Will Tamplin of an independent market research company as saying that “the breakdown in the Dollar Index is associated with a pending breakout in the euro.”
These developments are unfolding against the backdrop of de-dollarization, the process of reducing the US dollar’s hegemony in global trade and financial operations by shifting to alternative exchange methods, including national currencies and domestic payment systems, as well as modifying currency reserves.
US dollars – Sputnik International, 1920, 15.06.2023
Right now, numerous countries are lining up to move away from the greenback and scrap the use of the US currency in trade transactions. These include Russia, China, India, Brazil as well as Saudi Arabia and the United Arab Emirates.
By Oleg Burunov
Published by Sputnik Globe
Republished by The 21st Century
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