The global markets are currently experiencing a tumultuous change. Rising geopolitical changes are giving birth to new economic changes. At the same time, the US dollar devaluation has peaked at its prime, with alternative currencies like the Chinese yuan gaining steady momentum in the space.
Will the US dollar sustain such severe injuries to its prestige?
Also Read: ASEAN: Steps To Ditch US Dollar Gains Momentum In South East Asia
Chinese Yuan Surges To New Highs
According to the Financial Times, China’s use of the renminbi has recorded a new high in cross-border transactions. The renminbi is becoming an increasingly popular currency for cross-border transactions, with people opting for RMB to initiate global transactions.
The usage of the Renminbi has found a new footing in Russia, as the region is holistically using RMB to internationalize its transactions. The harsh US sanctions imposed on Russia have bolstered this currency change.
With the region being cut off from accessing SWIFT, the country sought refuge in RMB. This change of plans reportedly played an elemental role in boosting Renminbi’s global reputation.
“The sanction situation created a huge stimulus for China to develop its [financial] system and to develop solutions to link China’s system with the Russian one,” said Alexandra Prokopenko, a research fellow at the Carnegie Institute in Berlin.
At the same time, Gold is also gearing up for a massive rally. As per Rashad Hajiyev, a notable finance analyst, gold is attempting to break out, which may help the precious metal claim the coveted $3,000 mark.
Also Read: Cardano Gears Up To Embrace Chang Fork: Will ADA Spike This Weekend?
US Currency Plummets To New Lows: What’s Happening?
The DXY index traded near 100.71 last week, tiptoeing close to bearish zones and waters. The ballooning US debt metrics are also adding more pressure on the dollar. Global alliances like ASEAN and BRICS are in the process of ditching USD due to the currency being used as a source of weaponization.
The global financial system is gearing up for massive change. World economies are now promoting the local currency narrative, which includes streamlining the regional currency agenda. In this quest, ASEAN nations, in particular, are urging nations to lessen their reliance on the US dollar.
Indonesian PM Joko Widodo recently urged nations to use local credit cards and explore other local currency alternatives instead of relying on USD.
Also Read: Ripple: How High Can XRP Surge This Weekend? Will It Break Past $0.75?
He further shared that moving away from Western payment systems is crucial to prevent transactions from inviting unnecessary political repercussions.