Derailment is the most spoken word in the global market as emerging economies want to cut ties with the US dollar. The world is trying to dim the US dollar lights as it bolsters local currency and is accused of weaponizing the currency by the White House. From sanctions to tariffs, developing countries are bearing the brunt of US policies that only harm their native economy.
The global reserve currency situation for the US dollar is currently in question as developing countries aim to overthrow USD control. The paradigm shift towards America grew after the White House imposed sanctions on Russia in 2022. Sanctions have been extended to Iran and Belarus, among other countries, and in return have strengthened the de-communal agenda.
rabobank: The derailment trend remains here and continues
Rabobank’s head of Forex Strategy Jane Foley explained in a recent interview with Bloomberg that the outcome will continue. Foley stressed that the US cannot stop the initiative as developing countries decide to become dolls. They are now diversifying their reserves in amounts and other currencies, while simultaneously reducing the US dollar.
“Unco-working is a problem, a concern and we will continue.” Foley said it warned that USD’s reserve currency status is under threat. However, she explained that the US dollar is still alive because there are no actual alternatives in the market at the moment. “But we cannot immediately replace the US dollar. There is no clear alternative.” She said.
Additionally, the US dollar could drop if a new currency or basket of currencies becomes the official form of payment. It’s only a matter of time before the derailment gives us a stronger grasp of global financial markets. For the next decade or two, we were able to rewrite rules for the financial sector where the US dollar could remain in the backseat.
