As a seasoned crypto investor with over two decades of experience navigating global financial markets, I find myself both intrigued and cautiously optimistic about the recent surge in US Dollar dominance in international payments. Having weathered numerous economic storms and market cycles, I’ve learned to read between the lines and interpret the underlying trends that often lie beneath the headlines.
Globally, the U.S. Dollar‘s influence in financial transactions has soared, claiming an impressive 49% portion, marking a 12-year peak following a substantial 9% increase during the last two years.
As reported by Kobeissi Letter on social media platform X (previously known as Twitter), data from SWIFT indicates that the Euro, which was once a formidable competitor to the U.S. dollar, has seen a dramatic decrease in its strength.
As an analyst, I’ve observed a significant decline in the Euro’s dominance in global payments. Over the past decade, its share has fallen dramatically from approximately 39% to a decade-low of roughly 21%. This shift clearly indicates that the US dollar continues to hold the most influential position as the global currency, with no other contender coming close. Interestingly, I’ve also noticed an increase in the usage of the Chinese Yuan, which has risen from approximately 2% last year to nearly 5%. This trend suggests a potential shift in the global financial landscape.
NEWS FLASH: The U.S. Dollar has gained a 49% dominance in worldwide payment systems, marking a high not seen in twelve years, as per SWIFT data.
— The Kobeissi Letter (@KobeissiLetter) October 28, 2024
It’s important to mention that there are payment systems aside from SWIFT, such as SEPA, which is utilized for transactions within Europe. Nevertheless, SWIFT continues to be the predominant global transfer system, employed by more than 200 countries worldwide.
The supremacy of the US dollar is escalating during a period when the Federal Reserve is endeavoring to achieve something unparalleled, as inflation within the nation has significantly decreased by approximately 5.8% over the past two years – the most significant decrease since the 1980s – reaching 2.4% in September.
The reduction in interest rates is a significant move following a period when the Federal Reserve implemented one of the most vigorous series of rate increases in record history, escalating rates from virtually zero to 5.5% over the course of approximately 16 months.
It appears that a significant economic warning signal in the U.S. is currently flashing red, suggesting that a recession may be imminent. This indicator has a history of accurately predicting recessions over the past 75 years.
Although those metrics suggest a stable economy, JPMorgan Chase CEO Jamie Dimon expresses concern over the current global economic condition, citing ongoing geopolitical threats as a significant worry. He refers to this group of threats as an “evil axis,” implying that they indicate dangerous and worsening conditions.
He noted that inflation is moving down and the US economy seemingly avoided a recession, although “several critical issues remain,” including “large fiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world.”
For more than a year, Dimon has been expressing concerns about geopolitical instability, repeatedly labeling it as the most significant danger to the global economy. Recently, at the Financial Markets Quality Conference in Washington, he described Iran, North Korea, and Russia as a “formidable alliance” or “troublesome trio.
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2024-10-29 04:06