US Dollar Can Steadily Decline in the Next Few Years

Juhi Mirza
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With rising geopolitical tensions and the mayhem caused by Federal Reserve rate cut anticipations, the US dollar is currently being tackled from all possible corners.

The USD’s purchasing power has declined profusely, noting a 25% decline since 2020. With leading central banks pivoting towards gold as a hedge, the USD has yet again been compelled to fall back in its league.

Amidst the current chaos encouraging the US dollar, one analyst has predicted its steady fall over the next course of years, with its status as a currency reserve plummeting to new lows.

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US Dollar May Decline Over The Next Few Years

US Dollar bill
Source: Getty Images

Notable financial analyst Amit Kumar Gupta has floated a new prediction for USD on X. Per his analysis, US dollar is poised to undergo a steady decline over the next few years.

Backing the bold claim made on X, Gupta shared how the US dollar as a global currency has reached its peak, a zenith, and may potentially note a decline in the next few years.

“There is not much consensus on this point, but a strong view is that the USD as a global currency may have peaked and could potentially see a steady decline over the next many years.”

He further shared significant reasons, adding to why the US dollar is encountering a dent in its prestige. Gupta emphasized that, statistically, the share of global trade invoiced in USD has documented a notable decline.

Similarly, the US dollar reserves of global banks have also witnessed a stark downfall. These markers are bold enough to outline the serious economic crisis that the USD may soon be engulfed in over the next set of years.

“The share of global trade invoiced in USD terms and the USD reserves of global central bankers have witnessed a consistent decline in recent years. Moreover, the cross-border flow of funds from the US has witnessed a sharp rise in FY24. Unsustainable US public debt has led to a downgrade of the US sovereign rating outlook in 2023.”

While exploring the massive geo-political shifts, Gupta accentuated the ongoing China-US conflict, resulting in China winning the technological advancement race.

“Besides, the trade conflict with China has led to a conspicuous shift of technological advantage from the US to China. These trends may consolidate the position of commodity-producing emerging economies, enabling them to seek favorable terms of trade.”

The US Debt Interest Ratio May Note A Serious Spike Again

US flag capitol hill
Source: The Hill / Mariam Zuhaib, File

The US dollar debt metrics are not showing any signs of a possible decline. Per the Wall Street Silver on X, the US debt-interest ratio could increase to a potential $1.6 trillion. The metrics on national debt could gain significant traction, leading the US economic verticals to experience new pitfalls.

The US debt numbers spurred a new debate on X, where users were seen critiquing the current US economic trends.

Also Read: Currency: Is Gold’s High-Value Eroding The US Dollar’s Prestige?

Several users criticized the nation’s economic decisions and administrative policies. Users commented on various factors and elements that led to the US facing such serious economic contraction and pessimism.