The amalgamation of the Gulf Cooperation Council and the Association of Southeast Asian Nations (ASEAN) is growing rapidly. The two “dynamic sets” are inching closer, bridging various nations to establish prosperous trade routes.
This merger bolsters international trade and promotes the local currency usage narrative. With these two power pacts coming together, will the US dollar be able to handle their collective might?
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ASEAN X GCC: What’s Happening?
The secretary general of the Gulf Cooperation Council, Al Budaiwi, recently commented on the GCC’s growing friendship with ASEAN. Budaiwi said the Gulf Council is keen to deepen its relationship with the ASEAN nations. The collaboration intends to help magnify their collective presence and reach desired goals on a global level.
To provide more context, here are some key points worth considering:
- Al-Budaiwi made these comments while attending a recent ASEAN conference in Jakarta.
- Budaiwi’s visit was part of a significant GCC movement to establish robust trade ties with ASEAN nations.
- The meeting consisted of multiple significant discussions spanning a range of topics.
- Expansive trade discussions on a global scale were on the agenda.
- The tumultuous unrest in Gaza was also one of the event’s major highlights.
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What Does This “Pact” Mean For The Dollar?
The US dollar is currently referred to as the world’s leading currency. Its global reserve status allows it to bask in unique perks and benefits.
However, with the growing accusations concerning the USD being weaponized to sanction nations, the US dollar’s prestige has taken a direct hit. With BRICS nations hammering the dollar by curating their currency systems, finding its own pace has been a struggle.
Impact On the US Dollar
- Considering that the GCC and ASEAN nations can attain a prominent position within the global economic prospects, it can be particularly stressful for the US dollar to uphold its position.
- Both entities advocate for the local currency narrative, which could push USD into a dark corner.
- This can reduce global USD demand.
- It can also impact its valuation to a large extent.
- With three forces—the BRICS, ASEAN, and GCC—working against the USD, this could entail a shift in global economic power.
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The growing collaboration between GCC and ASEAN nations poses significant challenges for the US dollar, potentially leading to a shift in global economic power and a decline in the dollar’s status as a reserve currency.