The Indian rupee remained practically steady on Wednesday, owing to a possible intervention by the Reserve Bank of India (RBI), which helped the currency escape a record low, according to traders. At 10:00 a.m. IST, the rupee stood at 83.56 against the US dollar, hardly changing&nbsp;from its previous close of 83.5650.<o:p></o:p>

<h2 class="MsoNormal">RBI's strategic intervention in the NDF market<o:p></o:p></h2>

Traders said the RBI most likely intervened in the non-deliverable forwards (NDF) market before the local spot market opened at 9:00 a.m. IST. The goal of this intervention was to keep the rupee stable. Routine interventions by the RBI, especially in the NDF market, have consistently supported the currency in recent sessions. "The RBI's intervention in the NDF market has changed...We are now quite clear and explicit that the RBI is involved in the forward market," RBI Governor Shaktikanta Das said at a post-monetary policy press conference on Friday.<o:p></o:p>

<h2 class="MsoNormal">Shift in RBI's tactics to limit volatility<o:p></o:p></h2>

The central bank's strategy for managing rupee volatility has shifted, with a concentration on non-deliverable forwards rather than direct spot market operations. Market watchers have recognised this shift in methods, and Reuters has previously reported on it. The RBI's strategic action aims to create a more stable exchange rate environment in the face of altering market conditions.<o:p></o:p>

<h2 class="MsoNormal">Market reactions and future expectations<o:p></o:p></h2>

Local oil companies have placed dollar bids, but the currency is expected to trade in a restricted range due to the RBI's indication to the market that it will intervene to prevent further devaluation. "The RBI has signalled&nbsp;to the market that it will prevent further weakness," a foreign exchange trader at a state-run bank said. The dollar index held at 105.3, while most Asian currencies remained range-bound as investors awaited critical US consumer inflation data and the Federal Reserve's policy announcement later that day. <o:p></o:p>

The Fed is expected to hold rates steady, but new interest rate estimates will be widely watched. "Asia FX may face volatility from a potential upward shift in the Fed's median dot plot, which could push US yields and the US dollar higher," said Lloyd Chan, senior currency strategist at MUFG Bank.<o:p></o:p>

(With inputs from Agencies)<o:p></o:p>

<o:p></o:p>

The Indian rupee remained practically steady on Wednesday, owing to a possible intervention by the Reserve Bank of India (RBI), which helped the currency escape a record low, according to traders.

The Indian rupee remained practically steady on Wednesday, owing to a possible intervention by the Reserve Bank of India (RBI), which helped the currency escape a record low, according to traders. At 10:00 a.m. IST, the rupee stood at 83.56 against the US dollar, hardly changing from its previous close of 83.5650. RBI's strategic intervention in the NDF market Traders said the RBI most likely intervened in the non-deliverable forwards (NDF) market before the local spot market opened at 9:00 a.m. IST. The goal of this intervention was to keep the rupee stable. Routine interventions by the RBI, especially in the NDF market, have consistently supported the currency in recent sessions. "The RBI's intervention in the NDF market has changed...We are now quite clear and explicit that the RBI is involved in the forward market," RBI Governor Shaktikanta Das said at a post-monetary policy press conference on Friday. Shift in RBI's tactics to limit volatility The central bank's strategy for managing rupee volatility has shifted, with a concentration on non-deliverable forwards rather than direct spot market operations. Market watchers have recognised this shift in methods, and Reuters has previously reported on it. The RBI's strategic action aims to create a more stable exchange rate environment in the face of altering market conditions. Market reactions and future expectations Local oil companies have placed dollar bids, but the currency is expected to trade in a restricted range due to the RBI's indication to the market that it will intervene to prevent further devaluation. "The RBI has signalled to the market that it will prevent further weakness," a foreign exchange trader at a state-run bank said. The dollar index held at 105.3, while most Asian currencies remained range-bound as investors awaited critical US consumer inflation data and the Federal Reserve's policy announcement later that day. The Fed is expected to hold rates steady, but new interest rate estimates will be widely watched. "Asia FX may face volatility from a potential upward shift in the Fed's median dot plot, which could push US yields and the US dollar higher," said Lloyd Chan, senior currency strategist at MUFG Bank. (With inputs from Agencies)

RBI intervention helps the Indian Rupee avoid record-low

Now, we look at whether the dollar is losing its global dominance. International Monetary Fund's data reveals that US dollar's dominance as the world's primary reserve currency is slowly eroding. While it remains the most widely held reserve currency, the share has been declining for the past two decades. This trend continues despite recent strength in the dollar itself.

IMF data shows gradual decline in dollar's share of global reserves

IMF data shows the US Dollar is slowly losing its grip as the world’s reserve currency.&nbsp;

It’s still the most held reserve currency but has been declining for 20 years.&nbsp;

This trend continues even with the dollar strengthening recently.&nbsp;

Central banks are diversifying their reserves, going into non-traditional currencies like the Australian dollar, Canadian dollar and Chinese yuan.&nbsp;

It’s all about yield, diversification and ease of trading with new digital tech.&nbsp;

Some think geopolitical tensions will speed up the decline of the dollar’s reserve status.&nbsp;

But data shows this trend is bigger than just a few big reserve holders and includes most G20 economies.&nbsp;

China has actively promoted the internationalisation of its currency.&nbsp;

But despite that, the yuan’s share of global reserves has plateaued recently, mostly because of the recent depreciation of the currency.&nbsp;

US financial sanctions have also impacted reserve management decisions.&nbsp;

Central banks are slowly shifting away from currencies under sanctions, towards gold.&nbsp;

Gold’s share of global reserves is still low historically,&nbsp;

But some emerging market central banks are accumulating gold as a hedge against economic and geopolitical risks.&nbsp;

IMF says the decline of the dollar’s dominance is a long-term process, not a sudden drop.&nbsp;

While the dollar is still the most important reserve currency, central banks are looking to diversify their holdings.&nbsp;

This ‘de-dollarisation’ trend is driven by yield, tech and geopolitical risk.&nbsp;

Diversification is happening beyond major countries like Russia &amp; China. 46 G20 countries are currently leading this shift away from dollar.&nbsp;

IMF data shows the US Dollar is slowly losing its grip as the world’s reserve currency. It’s still the most held reserve currency but has been declining for 20 years.

IMF data shows the US Dollar is slowly losing its grip as the world’s reserve currency. It’s still the most held reserve currency but has been declining for 20 years. This trend continues even with the dollar strengthening recently. Central banks are diversifying their reserves, going into non-traditional currencies like the Australian dollar, Canadian dollar and Chinese yuan. It’s all about yield, diversification and ease of trading with new digital tech. Some think geopolitical tensions will speed up the decline of the dollar’s reserve status. But data shows this trend is bigger than just a few big reserve holders and includes most G20 economies. China has actively promoted the internationalisation of its currency. But despite that, the yuan’s share of global reserves has plateaued recently, mostly because of the recent depreciation of the currency. US financial sanctions have also impacted reserve management decisions. Central banks are slowly shifting away from currencies under sanctions, towards gold. Gold’s share of global reserves is still low historically, But some emerging market central banks are accumulating gold as a hedge against economic and geopolitical risks. IMF says the decline of the dollar’s dominance is a long-term process, not a sudden drop. While the dollar is still the most important reserve currency, central banks are looking to diversify their holdings. This ‘de-dollarisation’ trend is driven by yield, tech and geopolitical risk. Diversification is happening beyond major countries like Russia & China. 46 G20 countries are currently leading this shift away from dollar.

Dollar dominance fading? IMF data reveals falling share of US currency in global reserves

Watch the top headlines of the hour: - Israeli tanks seen on Gazan side of Rafah - Jordan King asks Biden to stop Rafah 'massacre' - India's top court hears Kejriwal's bail plea - Indian rupee rises against US dollar - Israel delegation to discuss Hamas proposal - India votes in Phase 3 today

India's top court hears Kejriwal's bail plea | Indian rupee rises against US dollar

The Japanese Yen is experiencing a sustained decline against the US Dollar, reaching a 34-year low. This depreciation is driven by the expectation that the Bank of Japan will maintain its ultra-loose monetary policy. While a weaker yen can benefit Japanese exports, it also pushes up import costs, leading to concerns about inflation and rising living expenses.

Japan aims to control Yen's slide amid market turmoil

The US dollar surged to three-month highs on Tuesday, propelled by robust inflation data that exceeded economists' expectations for January. <o:p></o:p>

According to Reuters, the Consumer Price Index (CPI) reported a 0.3 per cent increase on a monthly basis, surpassing the 0.2 per cent forecast. <o:p></o:p>

Year-on-year, the CPI rose by 3.1 per cent, exceeding the estimated 2.9 per cent growth. <o:p></o:p>

These figures reinforced market expectations that the Federal Reserve would maintain interest rates steady in March, boosting the dollar's strength.<o:p></o:p>

"The key message from today's CPI is that it's slowing but less than expected," Dec Mullarkey, Managing Director at SLC Management in Boston told Reuters.<o:p></o:p>

He highlighted that the reading supported the Fed's decision to await further assurance that inflation remained contained. <o:p></o:p>

As a result, the dollar index surged to a three-month high of 104.95, indicating a strong performance against a basket of major currencies. <o:p></o:p>

It was last up 0.7 per cent at 104.89, poised for its most substantial one-day gain since early February.<o:p></o:p>

The greenback's rally extended beyond inflation data, surpassing 150 yen for the first time since November. <o:p></o:p>

Analysts noted that the yen, which had depreciated over 6 per cent against the dollar this year, faced persistent pressure amid revised expectations of the Federal Reserve's monetary policy. <o:p></o:p>

The dollar's strength against the yen prompted speculation of potential intervention by Japanese officials to stabilise the currency.<o:p></o:p>

Market analysts emphasised the market's response to the inflation data, with Federal funds futures indicating no rate cut in March and a lower than 50 per cent probability of easing in May. <o:p></o:p>

Expectations aligned with the Fed's projections, suggesting around three rate cuts this year, as reflected in the "dot plot" released in December. <o:p></o:p>

Analysts anticipate reduced volatility in the market as expectations align with the Fed's forecasts.<o:p></o:p>

In addition to the dollar's surge, the euro depreciated by 0.6 per cent to $1.0707, reaching its lowest level since mid-November. <o:p></o:p>

Meanwhile, in the cryptocurrency market, bitcoin touched $50,383, its highest level since December 2021, before dipping below $50,000 following the CPI data release. <o:p></o:p>

Despite this, bitcoin has experienced an 18 per cent increase this year, supported by regulatory approvals for US-listed exchange-traded funds.<o:p></o:p>

Looking ahead, economists anticipate the US retail sales report, scheduled for Thursday. <o:p></o:p>

Recent forecasts suggest a potential decline of 0.1 per cent for January, following a 0.6 per cent rise in December. <o:p></o:p>

(With inputs from Reuters)<o:p></o:p>

The US dollar surged to three-month highs on Tuesday, propelled by robust inflation data that exceeded economists' expectations for January. According to Reuters, the Consumer Price Index (CPI) reported a 0.

The US dollar surged to three-month highs on Tuesday, propelled by robust inflation data that exceeded economists' expectations for January. According to Reuters, the Consumer Price Index (CPI) reported a 0.3 per cent increase on a monthly basis, surpassing the 0.2 per cent forecast. Year-on-year, the CPI rose by 3.1 per cent, exceeding the estimated 2.9 per cent growth. These figures reinforced market expectations that the Federal Reserve would maintain interest rates steady in March, boosting the dollar's strength. "The key message from today's CPI is that it's slowing but less than expected," Dec Mullarkey, Managing Director at SLC Management in Boston told Reuters. He highlighted that the reading supported the Fed's decision to await further assurance that inflation remained contained. As a result, the dollar index surged to a three-month high of 104.95, indicating a strong performance against a basket of major currencies. It was last up 0.7 per cent at 104.89, poised for its most substantial one-day gain since early February. The greenback's rally extended beyond inflation data, surpassing 150 yen for the first time since November. Analysts noted that the yen, which had depreciated over 6 per cent against the dollar this year, faced persistent pressure amid revised expectations of the Federal Reserve's monetary policy. The dollar's strength against the yen prompted speculation of potential intervention by Japanese officials to stabilise the currency. Market analysts emphasised the market's response to the inflation data, with Federal funds futures indicating no rate cut in March and a lower than 50 per cent probability of easing in May. Expectations aligned with the Fed's projections, suggesting around three rate cuts this year, as reflected in the "dot plot" released in December. Analysts anticipate reduced volatility in the market as expectations align with the Fed's forecasts. In addition to the dollar's surge, the euro depreciated by 0.6 per cent to $1.0707, reaching its lowest level since mid-November. Meanwhile, in the cryptocurrency market, bitcoin touched $50,383, its highest level since December 2021, before dipping below $50,000 following the CPI data release. Despite this, bitcoin has experienced an 18 per cent increase this year, supported by regulatory approvals for US-listed exchange-traded funds. Looking ahead, economists anticipate the US retail sales report, scheduled for Thursday. Recent forecasts suggest a potential decline of 0.1 per cent for January, following a 0.6 per cent rise in December. (With inputs from Reuters)

US dollar hits 3-month high on strong inflation data, surpasses 150 yen mark

<o:p></o:p>

WION's Business Desk brings you this daily round up of global stories from the world of business and economy.<o:p></o:p>

US dollar hits 3-month high on strong inflation data, surpasses 150 yen mark<o:p></o:p>

The US dollar surged to three-month highs on Tuesday, propelled by robust inflation data that exceeded economists' expectations for January.<o:p></o:p>

<a href="https://www.wionews.com/business-economy/us-dollar-hits-3-month-high-on-strong-inflation-data-surpasses-150-yen-mark-690078">Read more here</a> <o:p></o:p>

SpaceX fined after worker injury, records reveal history of safety concerns<o:p></o:p>

Elon Musk's SpaceX was fined $3,600 this month following an incident at its Washington state site that nearly resulted in an amputation, as per inspection records reviewed by Reuters.<o:p></o:p>

<a href="https://www.wionews.com/business-economy/spacex-fined-after-worker-injury-records-reveal-history-of-safety-concerns-690084">Read more here</a><o:p></o:p>

Nvidia on the brink of overtaking Alphabet in market after Amazon<o:p></o:p>

Nvidia, the leading AI chipmaker, is on the brink of surpassing Alphabet as the third most valuable company on Wall Street, after overtaking Amazon's market capitalisation for the first time in two decades, according to Reuters.<o:p></o:p>

<a href="https://www.wionews.com/business-economy/nvidia-on-the-brink-of-overtaking-alphabet-in-market-after-amazon-690089">Read more here </a><o:p></o:p>

Barclays faces lawsuit over discrimination allegations from vice president<o:p></o:p>

A vice president at Barclays has filed a lawsuit against the British bank, seeking approximately $290,000, alleging racial, religious, and gender discrimination.<o:p></o:p>

<a href="https://www.wionews.com/business-economy/barclays-faces-lawsuit-over-discrimination-allegations-from-vice-president-690094">Read more here </a><o:p></o:p>

Walmart in advanced talks to acquire Vizio for over $2 bn, boosting TV market control<o:p></o:p>

Retail giant Walmart is reportedly in advanced discussions to acquire smart-television manufacturer Vizio for a sum exceeding $2 billion, as reported by the Wall Street Journal on Tuesday.<o:p></o:p>

<a href="https://www.wionews.com/business-economy/walmart-in-advanced-talks-to-acquire-vizio-for-over-2-bn-boosting-tv-market-control-690100">Read more here </a><o:p></o:p>

Rising rents propel US inflation; rate cuts still anticipated in 2024<o:p></o:p>

The latest data from the Labour Department revealed a higher-than-anticipated increase in US consumer prices in January, driven primarily by a surge in the cost of rental housing.<o:p></o:p>

<a href="https://www.wionews.com/business-economy/rising-rents-propel-us-inflation-rate-cuts-still-anticipated-in-2024-690133">Read more here </a><o:p></o:p>

Disneyland character performers announce plans to unionise, seeking better benefits<o:p></o:p>

Character performers at Disneyland, embodying beloved figures like Mickey Mouse, Donald Duck, and Goofy, have disclosed intentions to join the Actors' Equity Association, a union representing professionals in live theatrical performance.<o:p></o:p>

<a href="https://www.wionews.com/business-economy/disneyland-character-performers-announce-plans-to-unionise-seeking-better-benefits-690139">Read more here </a><o:p></o:p>

China's declining birth rate puts teachers' jobs at risk: Millions face uncertain future by 2035<o:p></o:p>

In the wake of China's plummeting birth rate, the future of teaching, once considered a steadfast career choice in the nation, is now cast in uncertainty, the South China Morning Post (SCMP) reported.<o:p></o:p>

<a href="https://www.wionews.com/business-economy/chinas-declining-birth-rate-puts-teachers-jobs-at-risk-millions-face-uncertain-future-by-2035-690148">Read more here </a><o:p></o:p>

Love is in the air, but is it in your budget? Exploring the economic impact of Valentine's Day<o:p></o:p>

While millions prepare to celebrate love with chocolates, cards, and cosy dinners, the question arises: how much does this day of affection truly cost the economy, and is the pressure to spend worth it?

<a href="https://www.wionews.com/business-economy/love-is-in-the-air-but-is-it-in-your-budget-exploring-the-economic-impact-of-valentines-day-690154">Read more here </a><o:p></o:p>

Toyota announces leadership changes at Daihatsu following safety test scandal

In response to the revelation of rigged collision safety-tests, Toyota Motor Corp announced significant leadership changes within Daihatsu Motor, with both the president and chairman set to step down.

<a href="https://www.wionews.com/business-economy/toyota-announces-leadership-changes-at-daihatsu-following-safety-test-scandal-690175">Read more here</a>

FTC's antitrust lawsuit against Amazon scheduled for October 2026 trial

A US federal judge has set an October 2026 trial date for the Federal Trade Commission's (FTC) antitrust lawsuit against Amazon.<o:p></o:p>

<a href="https://www.wionews.com/business-economy/ftcs-antitrust-lawsuit-against-amazon-scheduled-for-october-2026-trial-690168">Read more here</a><o:p></o:p>

WION's Business Desk brings you this daily round up of global stories from the world of business and economy. US dollar hits 3-month high on strong inflation data, surpasses 150 yen mark The US dollar surged to three-month highs on Tuesday, propelled by robust inflation data that exceeded economists' expectations for January.

WION's Business Desk brings you this daily round up of global stories from the world of business and economy. US dollar hits 3-month high on strong inflation data, surpasses 150 yen mark The US dollar surged to three-month highs on Tuesday, propelled by robust inflation data that exceeded economists' expectations for January. Read more here SpaceX fined after worker injury, records reveal history of safety concerns Elon Musk's SpaceX was fined $3,600 this month following an incident at its Washington state site that nearly resulted in an amputation, as per inspection records reviewed by Reuters. Read more here Nvidia on the brink of overtaking Alphabet in market after Amazon Nvidia, the leading AI chipmaker, is on the brink of surpassing Alphabet as the third most valuable company on Wall Street, after overtaking Amazon's market capitalisation for the first time in two decades, according to Reuters. Read more here Barclays faces lawsuit over discrimination allegations from vice president A vice president at Barclays has filed a lawsuit against the British bank, seeking approximately $290,000, alleging racial, religious, and gender discrimination. Read more here Walmart in advanced talks to acquire Vizio for over $2 bn, boosting TV market control Retail giant Walmart is reportedly in advanced discussions to acquire smart-television manufacturer Vizio for a sum exceeding $2 billion, as reported by the Wall Street Journal on Tuesday. Read more here Rising rents propel US inflation; rate cuts still anticipated in 2024 The latest data from the Labour Department revealed a higher-than-anticipated increase in US consumer prices in January, driven primarily by a surge in the cost of rental housing. Read more here Disneyland character performers announce plans to unionise, seeking better benefits Character performers at Disneyland, embodying beloved figures like Mickey Mouse, Donald Duck, and Goofy, have disclosed intentions to join the Actors' Equity Association, a union representing professionals in live theatrical performance. Read more here China's declining birth rate puts teachers' jobs at risk: Millions face uncertain future by 2035 In the wake of China's plummeting birth rate, the future of teaching, once considered a steadfast career choice in the nation, is now cast in uncertainty, the South China Morning Post (SCMP) reported. Read more here Love is in the air, but is it in your budget? Exploring the economic impact of Valentine's Day While millions prepare to celebrate love with chocolates, cards, and cosy dinners, the question arises: how much does this day of affection truly cost the economy, and is the pressure to spend worth it? Read more here Toyota announces leadership changes at Daihatsu following safety test scandal In response to the revelation of rigged collision safety-tests, Toyota Motor Corp announced significant leadership changes within Daihatsu Motor, with both the president and chairman set to step down. Read more here FTC's antitrust lawsuit against Amazon scheduled for October 2026 trial A US federal judge has set an October 2026 trial date for the Federal Trade Commission's (FTC) antitrust lawsuit against Amazon. Read more here

WION Business Wrap | US dollar’s 3-month high, Nvidia’s rising market value and more

As we head into 2024, the dynamics of geopolitics are at the core of global markets. 
 
So far, America has imposed sanctions against countries to cut them off from the global payment systems and dollars. 
 
Many countries, including Russia, are looking at alternatives to the dollar. 
 
For a very long time, the US dollar has dominated international markets. It still does so, although, during the past 20 years, the US economy has produced a decreasing percentage of the world's production. 
 
Central banks are no longer keeping as much of the US dollar in reserves as they formerly did, even though the currency is still far more prevalent in international commerce, international debt, and non-bank borrowing than it is in the US share of trade, bond issuance, and international borrowing and lending. 
 
Dollar demand waning? 
 
The latest International Monetary Fund's (IMF) data shows a decline in the dollar's share in global central banks' foreign currency reserves.&nbsp; 
 
The data shows the dollar's share is down in the September quarter to the lowest since the final three months of last year. 
 
The extensive use of dollars in international commerce, particularly for commodities and energy, has helped the greenback over the years. 
 
The dollar's dominance among trade partners has allowed the US to sustain budget deficits and control funding costs by directing cash into US government bonds.&nbsp; 
 
Additionally, it helps US businesses since firms often find it less expensive to borrow money due to the extensive usage of dollars in international commerce, particularly for commodities and energy. 
 
The dollar has been the preferred reserve currency for most of the world's central banks.&nbsp; 
 
However, the dollar has progressively lost dominance since 2000, when its share was above 70%. &nbsp; 
 
The US currency's share is down to 59.2% in the September quarter, marking the lowest since it fell below 60% last year. 
 
The euro's share in the reserves fell slightly while the Japanese yen rose. The shares of the Chinese yuan, the British pound, the Australian and Canadian dollars, and the Swiss franc were changed only slightly. 
 
A group of "other currencies." including the rupee, rose in the previous quarter.&nbsp; 
 
What does it mean to global trade and currencies? 
 
This reflects the global mood towards the dollar and the US. 
 
Most countries are slowly but surely moving away from dollar-denominated trade.&nbsp; 
 
Instead, they seek to settle trade in their own currencies. India, for example, has set up a rupee-trade mechanism for trade settlements.&nbsp; 
 
China has also pushed for trade settlements in the yuan. These alternative trade settlement mechanisms are slowly gaining traction. 
 
But the dollar's share is still over 50%.&nbsp; 
 
Still, the shift away is clear and noticeable. 
 
Dollar lacks competition 
 
Despite a two-decade drop in its proportion of global foreign currency reserves, the US dollar is still utilised more than all other currencies combined. 
 
A new IMF working paper shows that the diminished significance of the US dollar has not been balanced by rises in the proportions of the other traditional reserve currencies - the euro, yen, and pound.&nbsp; 
 
Furthermore, even while the proportion of reserves kept in the renminbi has increased somewhat, this only makes up 25% of the recent move away from dollars, partially attributable to China's highly tight capital account.&nbsp; 
 
An update to the data in the IMF's working paper reveals that about one-third of the world's renminbi reserves were held by one nation, Russia. 
 
However, three-quarters of the shift away from dollars is accounted for by the currencies of smaller economies that haven't typically played a significant role in reserve portfolios, such as the South Korean won, the Swedish krona, and the Australian and Canadian dollars. 
 
The cost of employing credit derivatives to guarantee against default is a measure of economic risk premium, and a regression study of global reserve currency shares indicates that a greater premium deters a currency's position in global reserves.&nbsp; 
 
Holders prefer the currencies of nations with reputable governments, stable economies, and strong financial systems. 
 
So, it will take a long time for other currencies to be able to overshadow the greenback.

As we head into 2024, the dynamics of geopolitics are at the core of global markets. So far, America has imposed sanctions against countries to cut them off from the global payment systems and dollars.

As we head into 2024, the dynamics of geopolitics are at the core of global markets. So far, America has imposed sanctions against countries to cut them off from the global payment systems and dollars. Many countries, including Russia, are looking at alternatives to the dollar. For a very long time, the US dollar has dominated international markets. It still does so, although, during the past 20 years, the US economy has produced a decreasing percentage of the world's production. Central banks are no longer keeping as much of the US dollar in reserves as they formerly did, even though the currency is still far more prevalent in international commerce, international debt, and non-bank borrowing than it is in the US share of trade, bond issuance, and international borrowing and lending. Dollar demand waning? The latest International Monetary Fund's (IMF) data shows a decline in the dollar's share in global central banks' foreign currency reserves. The data shows the dollar's share is down in the September quarter to the lowest since the final three months of last year. The extensive use of dollars in international commerce, particularly for commodities and energy, has helped the greenback over the years. The dollar's dominance among trade partners has allowed the US to sustain budget deficits and control funding costs by directing cash into US government bonds. Additionally, it helps US businesses since firms often find it less expensive to borrow money due to the extensive usage of dollars in international commerce, particularly for commodities and energy. The dollar has been the preferred reserve currency for most of the world's central banks. However, the dollar has progressively lost dominance since 2000, when its share was above 70%. The US currency's share is down to 59.2% in the September quarter, marking the lowest since it fell below 60% last year. The euro's share in the reserves fell slightly while the Japanese yen rose. The shares of the Chinese yuan, the British pound, the Australian and Canadian dollars, and the Swiss franc were changed only slightly. A group of "other currencies." including the rupee, rose in the previous quarter. What does it mean to global trade and currencies? This reflects the global mood towards the dollar and the US. Most countries are slowly but surely moving away from dollar-denominated trade. Instead, they seek to settle trade in their own currencies. India, for example, has set up a rupee-trade mechanism for trade settlements. China has also pushed for trade settlements in the yuan. These alternative trade settlement mechanisms are slowly gaining traction. But the dollar's share is still over 50%. Still, the shift away is clear and noticeable. Dollar lacks competition Despite a two-decade drop in its proportion of global foreign currency reserves, the US dollar is still utilised more than all other currencies combined. A new IMF working paper shows that the diminished significance of the US dollar has not been balanced by rises in the proportions of the other traditional reserve currencies - the euro, yen, and pound. Furthermore, even while the proportion of reserves kept in the renminbi has increased somewhat, this only makes up 25% of the recent move away from dollars, partially attributable to China's highly tight capital account. An update to the data in the IMF's working paper reveals that about one-third of the world's renminbi reserves were held by one nation, Russia. However, three-quarters of the shift away from dollars is accounted for by the currencies of smaller economies that haven't typically played a significant role in reserve portfolios, such as the South Korean won, the Swedish krona, and the Australian and Canadian dollars. The cost of employing credit derivatives to guarantee against default is a measure of economic risk premium, and a regression study of global reserve currency shares indicates that a greater premium deters a currency's position in global reserves. Holders prefer the currencies of nations with reputable governments, stable economies, and strong financial systems. So, it will take a long time for other currencies to be able to overshadow the greenback.

Is the dollar's status as a global reserve currency at risk?

Russia and China have completely abandoned the use of Western currencies, including US Dollar, in their bilateral trade, said Russian Prime Minister Mikhail Mishustin on Tuesday (Dec 19).

While speaking during a meeting with his Chinese counterpart Li Qiang in Beijing, Mishustin said nearly all payments were being carried out in Rubles and Yuan.

The Russian PM is on a two-day visit to the Chinese capital.

“We continue to increase the share of national currencies in mutual settlements. If in 2020 this figure was about 20 per cent, then this year we have actually completely gotten rid of the currencies of third countries in mutual settlements,” Mishustin was quoted as saying by Russian media.

<h2>Red hot business ties</h2>

The Russian leader also stressed that the business ties between the two nations were booming, with bilateral trade turnover already reaching $200 billion ahead of schedule.

He also mentioned that a joint business forum held in Beijing earlier this year saw the attendance of more than 1,500 entrepreneurs from both countries.

Watch:&nbsp;Russian Prime Minister Mikhail Mishustin on a 2-day visit to China

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“We are creating comfortable conditions for the work of commercial firms on the Russian and Chinese markets. We have an extensive joint agenda,” Mishustin said.

Li Qiang also noted that the partnership between Russia and China had become extremely important against the backdrop of “global turbulence.”

<h2>Russia urges BRICS to ditch the dollar</h2>

Apart from abandoning the US dollar in its trade with China, Russia is also urging the BRICS organisation to develop financial relations and make mechanisms for settlements within the bloc.

Russian Finance Minister Anton Siluanov made this appeal at the Russia-China Financial Dialogue forum in Beijing on Monday, where his Chinese counterpart Lan Foan was also present.

<a href="https://www.wionews.com/world/explained-why-putin-may-have-been-responsible-for-chinese-fm-qin-gangs-disappearance-670255">Also read:&nbsp;Explained | Why Putin may have been responsible for Chinese FM Qin Gang’s disappearance</a>

The BRICS group of emerging economies – which currently incorporates Brazil, Russia, India, China, and South Africa – has been discussing ways to facilitate payments in local currencies between member countries.

“We need to further develop financial cooperation within the BRICS countries. Here we see opportunities to develop a payments system that would be independent of the infrastructure, which does not always fully fulfill the goals of individual countries,” Siluanov stated.

(With inputs from agencies)

Russia and China have completely abandoned the use of Western currencies, including US Dollar, in their bilateral trade, said Russian Prime Minister Mikhail Mishustin on Tuesday (Dec 19).

Russia and China have completely abandoned the use of Western currencies, including US Dollar, in their bilateral trade, said Russian Prime Minister Mikhail Mishustin on Tuesday (Dec 19). While speaking during a meeting with his Chinese counterpart Li Qiang in Beijing, Mishustin said nearly all payments were being carried out in Rubles and Yuan. The Russian PM is on a two-day visit to the Chinese capital. “We continue to increase the share of national currencies in mutual settlements. If in 2020 this figure was about 20 per cent, then this year we have actually completely gotten rid of the currencies of third countries in mutual settlements,” Mishustin was quoted as saying by Russian media. Red hot business ties The Russian leader also stressed that the business ties between the two nations were booming, with bilateral trade turnover already reaching $200 billion ahead of schedule. He also mentioned that a joint business forum held in Beijing earlier this year saw the attendance of more than 1,500 entrepreneurs from both countries. Watch: Russian Prime Minister Mikhail Mishustin on a 2-day visit to China × “We are creating comfortable conditions for the work of commercial firms on the Russian and Chinese markets. We have an extensive joint agenda,” Mishustin said. Li Qiang also noted that the partnership between Russia and China had become extremely important against the backdrop of “global turbulence.” Russia urges BRICS to ditch the dollar Apart from abandoning the US dollar in its trade with China, Russia is also urging the BRICS organisation to develop financial relations and make mechanisms for settlements within the bloc. Russian Finance Minister Anton Siluanov made this appeal at the Russia-China Financial Dialogue forum in Beijing on Monday, where his Chinese counterpart Lan Foan was also present. Also read: Explained | Why Putin may have been responsible for Chinese FM Qin Gang’s disappearance The BRICS group of emerging economies – which currently incorporates Brazil, Russia, India, China, and South Africa – has been discussing ways to facilitate payments in local currencies between member countries. “We need to further develop financial cooperation within the BRICS countries. Here we see opportunities to develop a payments system that would be independent of the infrastructure, which does not always fully fulfill the goals of individual countries,” Siluanov stated. (With inputs from agencies)

Russia, China completely abandon US dollar in bilateral trade, says Russian PM

JPMorgan analysts anticipate that the 2024 US presidential election, likely featuring President Joe Biden and former President Donald Trump, will elevate the dollar's status, driven by the potential for an intensified trade war. &nbsp;

Emphasising the impact on currencies resulting from potential trade tariffs, JPMorgan's foreign-exchange strategists, Meera Chandan and Patrick Locke, underscored Trump's protectionist stance among Republican nominees as a key factor.

"Renewed tariff risk will be dollar positive," the analysts said. They add that the potential expansion of tariffs to regions beyond China, such as Europe, Mexico, and broader Asia could significantly strengthen the dollar.

Specifically, a universal 10 per cent tariff might result in a 4 per cent to 6 per cent boost in the greenback's trade-weighted value, particularly as an expanding trade war influences pro-cyclical, growth-sensitive currencies.

As the presidential election looms, JPMorgan highlighted the likelihood of a Biden-Trump matchup "if current polling persists". The strategists emphasise that under President Biden, tariffs inherited from the Trump era have largely remained in place.

While fiscal policy played a pivotal role in influencing currency markets during the 2016 and 2020 elections, JPMorgan anticipates diminished significance as the 2024 election progresses. The strategists assert that potential fiscal changes, which were once instrumental in foreign exchange risk, may not have the same capacity to differentiate US growth from that of its peers. &nbsp;

With ongoing geopolitical uncertainties and trade tensions, this month had earlier witnessed the Bloomberg Dollar Spot Index registering its worst week since July, erasing year-to-date gains. The index is presently on track for its worst monthly decline in a year, reflecting a shift that has caught investors off guard.

(With inputs from Bloomberg)

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JPMorgan analysts anticipate that the 2024 US presidential election, likely featuring President Joe Biden and former President Donald Trump, will elevate the dollar's status, driven by the potential for an intensified trade war.

JPMorgan analysts anticipate that the 2024 US presidential election, likely featuring President Joe Biden and former President Donald Trump, will elevate the dollar's status, driven by the potential for an intensified trade war. Emphasising the impact on currencies resulting from potential trade tariffs, JPMorgan's foreign-exchange strategists, Meera Chandan and Patrick Locke, underscored Trump's protectionist stance among Republican nominees as a key factor. "Renewed tariff risk will be dollar positive," the analysts said. They add that the potential expansion of tariffs to regions beyond China, such as Europe, Mexico, and broader Asia could significantly strengthen the dollar. Specifically, a universal 10 per cent tariff might result in a 4 per cent to 6 per cent boost in the greenback's trade-weighted value, particularly as an expanding trade war influences pro-cyclical, growth-sensitive currencies. As the presidential election looms, JPMorgan highlighted the likelihood of a Biden-Trump matchup "if current polling persists". The strategists emphasise that under President Biden, tariffs inherited from the Trump era have largely remained in place. While fiscal policy played a pivotal role in influencing currency markets during the 2016 and 2020 elections, JPMorgan anticipates diminished significance as the 2024 election progresses. The strategists assert that potential fiscal changes, which were once instrumental in foreign exchange risk, may not have the same capacity to differentiate US growth from that of its peers. With ongoing geopolitical uncertainties and trade tensions, this month had earlier witnessed the Bloomberg Dollar Spot Index registering its worst week since July, erasing year-to-date gains. The index is presently on track for its worst monthly decline in a year, reflecting a shift that has caught investors off guard. (With inputs from Bloomberg) WATCH WION LIVE HERE

2024 election to propel US dollar amid, predicts JPMorgan. Here's why

The worldwide effort to reduce the dollar's dominance has taken a setback, with the dollar's participation in global payments reaching a new high. 
&nbsp; 
An international movement led by China and Russia against the dollar's global dominance has suffered a blow, with the greenback’s percentage of global payments reaching a new high. 
&nbsp; 
Data from the Society for Worldwide Interbank Financial Telecommunication, generally known as SWIFT, showed that in July, a record 46 percent of foreign exchange payments via the messaging system used the US dollar, as per Bloomberg. 
&nbsp; 
The increase in dollar-based SWIFT payments calls into question the drive to abolish the dollar's hegemony over global payments and financial transfers. 
&nbsp; 
SWIFT was founded in 1973 to provide a neutral forum for banks to discuss financial transfers, transactions, and exchanges. The service connects over 11,000 financial institutions from over 200 countries and territories. 
&nbsp; 
Following Moscow's invasion of Ukraine, countries such as China, Russia, and India have been involved in the anti-dollar campaign, particularly after many Russian banks were booted off of SWIFT as part of Western sanctions. 
&nbsp; 
Furthermore, the euro, pound, yen, and yuan were also popular currencies in July. Chinese currency also set records, with more than 3 percent of SWIFT communications referring to the yuan. Bloomberg stated that it was barely 0.03 percent around 13 years ago. 
&nbsp; 
Specifically, the three countries have performed energy exchanges in the yuan, rupee, and ruble during the last year in an effort to minimize their dependency on the US dollar. Meanwhile, the BRICS countries are considering developing a unified currency to compete with the dollar. 
&nbsp; 
However, some market experts have slammed the so-called dedollarisation plans, with one calling the planned BRICS currency proposal "embarrassing."

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The worldwide effort to reduce the dollar's dominance has taken a setback, with the dollar's participation in global payments reaching a new high. An international movement led by China and Russia against the dollar's global dominance has suffered a blow, with the greenback’s percentage of global payments reaching a new high.

The worldwide effort to reduce the dollar's dominance has taken a setback, with the dollar's participation in global payments reaching a new high. An international movement led by China and Russia against the dollar's global dominance has suffered a blow, with the greenback’s percentage of global payments reaching a new high. Data from the Society for Worldwide Interbank Financial Telecommunication, generally known as SWIFT, showed that in July, a record 46 percent of foreign exchange payments via the messaging system used the US dollar, as per Bloomberg. The increase in dollar-based SWIFT payments calls into question the drive to abolish the dollar's hegemony over global payments and financial transfers. SWIFT was founded in 1973 to provide a neutral forum for banks to discuss financial transfers, transactions, and exchanges. The service connects over 11,000 financial institutions from over 200 countries and territories. Following Moscow's invasion of Ukraine, countries such as China, Russia, and India have been involved in the anti-dollar campaign, particularly after many Russian banks were booted off of SWIFT as part of Western sanctions. Furthermore, the euro, pound, yen, and yuan were also popular currencies in July. Chinese currency also set records, with more than 3 percent of SWIFT communications referring to the yuan. Bloomberg stated that it was barely 0.03 percent around 13 years ago. Specifically, the three countries have performed energy exchanges in the yuan, rupee, and ruble during the last year in an effort to minimize their dependency on the US dollar. Meanwhile, the BRICS countries are considering developing a unified currency to compete with the dollar. However, some market experts have slammed the so-called dedollarisation plans, with one calling the planned BRICS currency proposal "embarrassing." WATCH WION LIVE HERE

De-dollarisation efforts falter as US dollar's share in global trade reaches record high

Argentina's economic crisis and South American nation's continued reliance on the US dollar has resulted into an opportunity for Chinese Yuan that Bejing didn't see coming. Many leading companies are now embracing the Chinese Yuan, a currency that has not played much significant role in global trade so far.&nbsp;

According to Argentina's customs&nbsp;agency tally cited by Bloomberg, more than 500 Argentine companies have requested to pay for imports in yuan.

The import payments in the Chinese currency equivalent to $2.9 billion have reportedly been authorised.

In first 10 days of June, yuan transactions in Argentina’s currency market have doubled when compared to all of May, to about $285 million.&nbsp;

At the same time, the share of yuan transactions in Argentina’s foreign currency market recently hit a daily record of 28 per cent, compared with just 5 per cent in May, according to data from Mercado Abierto Electrónico exchanges cited by Bloomberg.&nbsp;

<h2>Argentina's embrace of Chinese Yuan: What does it mean?</h2>

The trend reportedly highlights both Argentina's economic crisis as well as China’s ambitions for the yuan.&nbsp;

"The central bank doesn’t have dollars, so it needs the emergency aid China is offering," Marcelo Elizondo, a trade economist in Buenos Aires, was quoted as saying by Bloomberg.&nbsp;

Also watch |&nbsp;Is the dollar era nearing an end?

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"For Argentina, its currency ties to China represents an emergency, but for China its a point of leverage to take advantage of a geopolitical opportunity," Elizondo added.

<h2>US dollar's receding dominance: What is happening?</h2>

The ongoing war in Ukraine and corresponding western economic sanctions on Russia have pressed many nations to opt for non-dollar trade routes, stoking a pattern of assertive financial independence among the nations of Global South.&nbsp;

Earlier, Brazil's President Luiz Inácio Lula da Silva had made an impassioned call to his BRICS counterparts Russia, India, China and South Africa to replace the US dollar with their own currencies for trading among the BRICS member nations.&nbsp;

Lula's comments came amid efforts by India, China and Russia to set up streams for trade in their own currencies and expanding calls amongst BRICS nations to launch a potential common currency mechanism for trade.&nbsp;

Also read |&nbsp;<a href="https://www.wionews.com/business-economy/brazils-president-lula-assents-to-common-brics-currency-to-counter-us-dollars-dominance-582289">Brazil's President Lula seeks common BRICS currency to counter US dollar's dominance</a>

"Every night I ask myself why all countries have to base their trade on the dollar," Lula had said at the New Development Bank in Shanghai, also called the BRICS bank.&nbsp;

"Who decided that our currencies were weak, that they didn't have value in other countries?," Lula asked.&nbsp;

<h2>China's Yuan outreach to Argentina</h2>

China recently allowed Argentina to use more than half of a $18 billion currency swap line for bilateral trade.&nbsp;

The two nations have shared a bilateral swap agreement since 2009.

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Argentina's economic crisis and South American nation's continued reliance on the US dollar has resulted into an opportunity for Chinese Yuan that Bejing didn't see coming.

Argentina's economic crisis and South American nation's continued reliance on the US dollar has resulted into an opportunity for Chinese Yuan that Bejing didn't see coming. Many leading companies are now embracing the Chinese Yuan, a currency that has not played much significant role in global trade so far. According to Argentina's customs agency tally cited by Bloomberg, more than 500 Argentine companies have requested to pay for imports in yuan. The import payments in the Chinese currency equivalent to $2.9 billion have reportedly been authorised. In first 10 days of June, yuan transactions in Argentina’s currency market have doubled when compared to all of May, to about $285 million. At the same time, the share of yuan transactions in Argentina’s foreign currency market recently hit a daily record of 28 per cent, compared with just 5 per cent in May, according to data from Mercado Abierto Electrónico exchanges cited by Bloomberg. Argentina's embrace of Chinese Yuan: What does it mean? The trend reportedly highlights both Argentina's economic crisis as well as China’s ambitions for the yuan. "The central bank doesn’t have dollars, so it needs the emergency aid China is offering," Marcelo Elizondo, a trade economist in Buenos Aires, was quoted as saying by Bloomberg. Also watch | Is the dollar era nearing an end? × "For Argentina, its currency ties to China represents an emergency, but for China its a point of leverage to take advantage of a geopolitical opportunity," Elizondo added. US dollar's receding dominance: What is happening? The ongoing war in Ukraine and corresponding western economic sanctions on Russia have pressed many nations to opt for non-dollar trade routes, stoking a pattern of assertive financial independence among the nations of Global South. Earlier, Brazil's President Luiz Inácio Lula da Silva had made an impassioned call to his BRICS counterparts Russia, India, China and South Africa to replace the US dollar with their own currencies for trading among the BRICS member nations. Lula's comments came amid efforts by India, China and Russia to set up streams for trade in their own currencies and expanding calls amongst BRICS nations to launch a potential common currency mechanism for trade. Also read | Brazil's President Lula seeks common BRICS currency to counter US dollar's dominance "Every night I ask myself why all countries have to base their trade on the dollar," Lula had said at the New Development Bank in Shanghai, also called the BRICS bank. "Who decided that our currencies were weak, that they didn't have value in other countries?," Lula asked. China's Yuan outreach to Argentina China recently allowed Argentina to use more than half of a $18 billion currency swap line for bilateral trade. The two nations have shared a bilateral swap agreement since 2009. WATCH WION LIVE HERE

Argentina chooses Chinese Yuan over US dollar amid economic crisis

Reports from Egypt suggest that the country may pay for imports from India in rupees. Egyptian supply minister Ali Moselhy told Reuters that the country is looking to pay for imports from India, China and Russia in their local currencies instead of the US Dollar.

Egypt may start paying for Indian imports in rupees

Here, we bring you the news that is trending across WION's social media platforms - Ten ASEAN nations are on the verge of de-dollarisation agreeing to promote their own native currencies.

De-Dollarisation: 10 ASEAN countries agree to ditch the US Dollar

The Pakistan rupee on Tuesday hit a new record low of 287.9 rupees against the US dollar. There's no let up from the economic crisis as the country battles record-high inflation and falling foreign reserves.

Pakistan Central Bank hikes interest rates to record 21%

As a Delhi resident and economic journalist in the 1990s, I got to know first-hand what I call the Dollar Paradox.

On the one hand, India was recovering from a severe balance of payments crisis in 1990/91. This eroded foreign exchange levels to a new low and ushered in an IMF-supervised macroeconomic adjustment programme that led eventually to the Indian rupee being floated on the current account; the US dollar was admittedly king as India struggled to boost exports.

On the other hand, a visit to Palika Bazaar at the heart of Connaught Place in New Delhi showed me the power of the rupee.

India was slowly ending a decades-old rupee trade with the now-collapsed Soviet Union but Russians loved leather jackets, Assamese tea and other goods at the glorified flea market that looks more like a refurbished underground parking. They mostly paid in rupees, which they had their own way of finding. Many shopkeepers at Palika Bazaar could speak Russian, as did their signboards. Pssssst. With some common sense or imagination, you could link all that up with sex trade involving women from the former USSR.

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/brics-common-currency-soon-india-china-step-up-to-counter-us-dollars-dominance-578660">BRICS common currency soon? India, China step up to counter US dollar's dominance</a>

The global domination of the US dollar is now seriously and furiously debated but its dominance is a statistical fact. About 60 per cent of the world's foreign exchange reserves are still in US treasury bonds or dollar-denominated instruments, though the share is steadily falling.

We need to ask why the dollar has been king and also why it has been steadily falling but also some hard questions on the new attempts for a BRICS (Brazil, Russia, India, China, South Africa) plan for the group to have its own currency.

Speaking at the <a href="https://www.wionews.com/business-economy/brics-common-currency-soon-india-china-step-up-to-counter-us-dollars-dominance-578660">St. Petersburg International Economic Forum event</a>&nbsp;in New Delhi last week, Russian parliamentary official Alexander Babakov said domestic currencies being used in transactions could be a good transition arrangement pending a digital or alternative currency though it is acknowledged that India and China do not see eye to eye on many issues (unless you count soldiers staring at each other on their unresolved international boundary).

I think it is too early to predict the dollar's demise, and here are my reasons.

<ul>
	<li>The US is still the world’s technology leader. With everything from microchips to Artificial Intelligence and biotechnology in the hands of US-led or American companies, the strength of intellectual property will keep the US economy strong enough. By extension, the dollar will have its advantages. 
	&nbsp;</li>
	<li>China has an opaque state-controlled system in which the Yuan has been artificially controlled by Beijing for decades. Its data is often unreliable and its foreign trade is substantially closed. So, it is difficult for those who deal in trade matters to easily bridge the trust deficit with China. 
	&nbsp;</li>
	<li>Russia is talking about an alternative currency because it suits Moscow and President Putin but its economy as well as military conduct following the Ukraine war make it more of a potential pariah than a consensus builder.&nbsp; 
	&nbsp;</li>
	<li>Brazil and South Africa are not big enough as economic forces except as add-ons 
	&nbsp;</li>
	<li>The US has a strong culture of institutional arrangements such as rule of law, transparency in statistics and a vibrant open society. This will indirectly help the dollar hold its fort.</li>
</ul>

My personal memories of Palika Bazaar tell me that some kind of domestic-currency-denominated trade between BRICS economies can be somewhere between a barter and a real hard currency in the foreseeable future. But there is a long haul for a new currency to emerge.

ALSO WATCH |&nbsp;Gravitas: China, Russia ditch dollar for gas trade

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India is in a unique position which it shares with the&nbsp;European Union and American economies respectively. It is democratic and its statistical system and fiscal practices are quite transparent even when there are troubles. Just as US bank failures need not mean a big blow to the US dollar, India's fiscal problems need not hurt the rupee beyond a point. The rupee on its own stands stronger in such a context.

The US dollar is still a big brand, though its product is questionable as days go by. Just as iPhones have affordable Asian brand clones, the US dollar is heading for similar currency clones. It is easier for India to boost its own rupee than play ball with difficult China and a truant Moscow.

Demand and supply are what increasingly power up India and China as economic powers. But the currency as a product has political, economic, ethical and historical attributes. This is where we need to understand that the dollar is not a pushover.

Russia's oil, China's forex reserves and India's productive population will increasingly influence global currency movements but don't write the dollar's obituary just yet.

(Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)&nbsp;

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As a Delhi resident and economic journalist in the 1990s, I got to know first-hand what I call the Dollar Paradox. On the one hand, India was recovering from a severe balance of payments crisis in 1990/91.

As a Delhi resident and economic journalist in the 1990s, I got to know first-hand what I call the Dollar Paradox. On the one hand, India was recovering from a severe balance of payments crisis in 1990/91. This eroded foreign exchange levels to a new low and ushered in an IMF-supervised macroeconomic adjustment programme that led eventually to the Indian rupee being floated on the current account; the US dollar was admittedly king as India struggled to boost exports. On the other hand, a visit to Palika Bazaar at the heart of Connaught Place in New Delhi showed me the power of the rupee. India was slowly ending a decades-old rupee trade with the now-collapsed Soviet Union but Russians loved leather jackets, Assamese tea and other goods at the glorified flea market that looks more like a refurbished underground parking. They mostly paid in rupees, which they had their own way of finding. Many shopkeepers at Palika Bazaar could speak Russian, as did their signboards. Pssssst. With some common sense or imagination, you could link all that up with sex trade involving women from the former USSR. ALSO READ | BRICS common currency soon? India, China step up to counter US dollar's dominance The global domination of the US dollar is now seriously and furiously debated but its dominance is a statistical fact. About 60 per cent of the world's foreign exchange reserves are still in US treasury bonds or dollar-denominated instruments, though the share is steadily falling. We need to ask why the dollar has been king and also why it has been steadily falling but also some hard questions on the new attempts for a BRICS (Brazil, Russia, India, China, South Africa) plan for the group to have its own currency. Speaking at the St. Petersburg International Economic Forum event in New Delhi last week, Russian parliamentary official Alexander Babakov said domestic currencies being used in transactions could be a good transition arrangement pending a digital or alternative currency though it is acknowledged that India and China do not see eye to eye on many issues (unless you count soldiers staring at each other on their unresolved international boundary). I think it is too early to predict the dollar's demise, and here are my reasons. The US is still the world’s technology leader. With everything from microchips to Artificial Intelligence and biotechnology in the hands of US-led or American companies, the strength of intellectual property will keep the US economy strong enough. By extension, the dollar will have its advantages. China has an opaque state-controlled system in which the Yuan has been artificially controlled by Beijing for decades. Its data is often unreliable and its foreign trade is substantially closed. So, it is difficult for those who deal in trade matters to easily bridge the trust deficit with China. Russia is talking about an alternative currency because it suits Moscow and President Putin but its economy as well as military conduct following the Ukraine war make it more of a potential pariah than a consensus builder. Brazil and South Africa are not big enough as economic forces except as add-ons The US has a strong culture of institutional arrangements such as rule of law, transparency in statistics and a vibrant open society. This will indirectly help the dollar hold its fort. My personal memories of Palika Bazaar tell me that some kind of domestic-currency-denominated trade between BRICS economies can be somewhere between a barter and a real hard currency in the foreseeable future. But there is a long haul for a new currency to emerge. ALSO WATCH | Gravitas: China, Russia ditch dollar for gas trade × India is in a unique position which it shares with the European Union and American economies respectively. It is democratic and its statistical system and fiscal practices are quite transparent even when there are troubles. Just as US bank failures need not mean a big blow to the US dollar, India's fiscal problems need not hurt the rupee beyond a point. The rupee on its own stands stronger in such a context. The US dollar is still a big brand, though its product is questionable as days go by. Just as iPhones have affordable Asian brand clones, the US dollar is heading for similar currency clones. It is easier for India to boost its own rupee than play ball with difficult China and a truant Moscow. Demand and supply are what increasingly power up India and China as economic powers. But the currency as a product has political, economic, ethical and historical attributes. This is where we need to understand that the dollar is not a pushover. Russia's oil, China's forex reserves and India's productive population will increasingly influence global currency movements but don't write the dollar's obituary just yet. (Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

The US dollar is shaky, but let us not dream of an alt-currency in a hurry

The Pakistani rupee fell to a historic low on Thursday at 255.43 rupees to a dollar. The latest fall of 24.11 Pakistani rupees came as Islamabad lifted the exchange cap to unlock a bailout from the International Monetary Fund (IMF).&nbsp;Exchange Companies Association of Pakistan President Zafar Paracha told AFP the cap was lifted on Wednesday "in consultation with the state bank".

Mohammad Sohail, the CEO of Topline Securities, told AFP: "Inflation is bound to rise further."

Pakistan is drastically short on foreign reserves owing to persistently rising demand for the dollar.

ALSO WATCH |&nbsp;<a href="https://www.wionews.com/videos/wion-dispatch-pakistan-left-with-only-three-weeks-of-forex-cover-555235">WION Dispatch: Pakistan left with only three-weeks of forex cover</a>

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Reports citing Pakistani government officials suggest that the country&nbsp;is in dire economic straits. It is reportedly left with foreign exchange reserves enough to pay only around three weeks of imports. This, added with the burden of external debt, has made the Pakistani economic forecast the worst in recent history.

The Pakistani rupee recorded a 9.6 per cent decline, in the second-biggest drop in a single session, brokerage Topline Securities said, according to news agency AFP.

Pakistani Rupee: Which was the previous low against the dollar?&nbsp;

Pakistan recorded a low of 240 rupees against a dollar in July 2022, at the height of devastating floods that the country faced.

The state of Pakistan economy: How bad is it?

Thousands of shipping containers packed with raw materials for industry, foodstuffs, and medical equipment are being held up at Karachi port because banks have refused to guarantee importers' dollar transactions. The country also suffered from a nationwide electricity outage earlier this week, linked to a cost-cutting measure, estimated to have cost the textile industry alone $70 million. 
 
Prime Minister Shehbaz Sharif, who ousted former Prime Minister Imran Khan Khan in a no-confidence vote earlier last year, has also been reluctant to meet loan conditions amid falling popularity and political volatility.&nbsp;

(With inputs from agencies)

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The Pakistani rupee fell to a historic low on Thursday at 255.43 rupees to a dollar. The latest fall of 24.11 Pakistani rupees came as Islamabad lifted the exchange cap to unlock a bailout from the International Monetary Fund (IMF).

The Pakistani rupee fell to a historic low on Thursday at 255.43 rupees to a dollar. The latest fall of 24.11 Pakistani rupees came as Islamabad lifted the exchange cap to unlock a bailout from the International Monetary Fund (IMF). Exchange Companies Association of Pakistan President Zafar Paracha told AFP the cap was lifted on Wednesday "in consultation with the state bank". Mohammad Sohail, the CEO of Topline Securities, told AFP: "Inflation is bound to rise further." Pakistan is drastically short on foreign reserves owing to persistently rising demand for the dollar. ALSO WATCH | WION Dispatch: Pakistan left with only three-weeks of forex cover × Reports citing Pakistani government officials suggest that the country is in dire economic straits. It is reportedly left with foreign exchange reserves enough to pay only around three weeks of imports. This, added with the burden of external debt, has made the Pakistani economic forecast the worst in recent history. The Pakistani rupee recorded a 9.6 per cent decline, in the second-biggest drop in a single session, brokerage Topline Securities said, according to news agency AFP. Pakistani Rupee: Which was the previous low against the dollar? Pakistan recorded a low of 240 rupees against a dollar in July 2022, at the height of devastating floods that the country faced. The state of Pakistan economy: How bad is it? Thousands of shipping containers packed with raw materials for industry, foodstuffs, and medical equipment are being held up at Karachi port because banks have refused to guarantee importers' dollar transactions. The country also suffered from a nationwide electricity outage earlier this week, linked to a cost-cutting measure, estimated to have cost the textile industry alone $70 million. Prime Minister Shehbaz Sharif, who ousted former Prime Minister Imran Khan Khan in a no-confidence vote earlier last year, has also been reluctant to meet loan conditions amid falling popularity and political volatility. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Pakistani rupee slumps 9.6% to historic low against US dollar as nation seeks IMF bailout

The dollar gained against the yen, the euro and the pound on Monday after data showed that US&nbsp;services industry activity unexpectedly picked up in November, prompting speculation the Federal Reserve may lift interest rates more than recently projected.

The Institute for Supply Management (ISM) said its non-manufacturing PMI increased to 56.5 last month from 54.4 in October, indicating that the services sector, which accounts for more than two-thirds of US economic activity, remained resilient in the face of rising interest rates. Economists polled by Reuters had forecast the non-manufacturing PMI slipping to 53.1.

The survey followed on the heels of stronger-than-expected job and wage growth data for November released last Friday. Consumer spending also accelerated in October.

The upbeat reports have raised optimism the economy could avoid recession next year, with growth just slowing sharply, while also spurring speculation about how high rates will rise.

"The ISM services PMI data highlighted a US economy that's still showing some strength, despite tighter financial conditions," said Priscilla Thiagamoorthy, an economist at BMO Capital Markets. "While that's good news for the growth outlook, it's not so great for the Fed trying to dampen demand and ease inflation."

Fed Chair Jerome Powell said last week the US central bank could scale back the pace of its rate increases "as soon as December."

The dollar climbed 1.68% against the yen to 136.615 yen, bouncing from Friday's three-and-a-half month low of 133.62, while sterling, which had risen to a more than five-month high of $1.2345 in Asian trade Monday, was down 0.94% at $1.2178 at 2:15 p.m. EST (1915 GMT).

The euro slid 0.42% to $1.0494, having earlier climbed to $1.0585, its highest level since June 28.

The dollar index, which tracks the greenback against six peers, fell 1.4% last week, and 5% in November, its worst month since 2010.

But now speculation is growing that the Fed 'pivot' narrative has run its course.

"I think this issue about 'peak inflation, peak rates, peak dollar' - I think - is slowly turning into a 'persistence of inflation, a persistence of higher-for-longer interest rates," said Jane Foley, senior FX strategist at Rabobank.

The dollar's aggregate positioning against G10 currencies is now neutral, and at the lowest levels since August 2021, according to ING calculations based on CFTC data.

ING also believes that dollar softening may have run its course for now, given the possibility of the Fed maintaining its hawkish narrative for longer, that relaxing China's COVID restrictions could prove complicated, and that oil and gas prices could rise again.

The other major factor for markets on Monday was China, where several cities have been easing their COVID restrictions. Official messaging about how dangerous the virus is also has changed following recent, unprecedented protests against the government's uncompromising "dynamic zero-COVID" strategy.

This boosted China's yuan, and the dollar fell below 7.0 yuan in offshore trade for the first time since mid September, and was last at 6.9767.

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The dollar gained against the yen, the euro and the pound on Monday after data showed that US services industry activity unexpectedly picked up in November, prompting speculation the Federal Reserve may lift interest rates more than recently projected.

The dollar gained against the yen, the euro and the pound on Monday after data showed that US services industry activity unexpectedly picked up in November, prompting speculation the Federal Reserve may lift interest rates more than recently projected. The Institute for Supply Management (ISM) said its non-manufacturing PMI increased to 56.5 last month from 54.4 in October, indicating that the services sector, which accounts for more than two-thirds of US economic activity, remained resilient in the face of rising interest rates. Economists polled by Reuters had forecast the non-manufacturing PMI slipping to 53.1. The survey followed on the heels of stronger-than-expected job and wage growth data for November released last Friday. Consumer spending also accelerated in October. The upbeat reports have raised optimism the economy could avoid recession next year, with growth just slowing sharply, while also spurring speculation about how high rates will rise. "The ISM services PMI data highlighted a US economy that's still showing some strength, despite tighter financial conditions," said Priscilla Thiagamoorthy, an economist at BMO Capital Markets. "While that's good news for the growth outlook, it's not so great for the Fed trying to dampen demand and ease inflation." Fed Chair Jerome Powell said last week the US central bank could scale back the pace of its rate increases "as soon as December." The dollar climbed 1.68% against the yen to 136.615 yen, bouncing from Friday's three-and-a-half month low of 133.62, while sterling, which had risen to a more than five-month high of $1.2345 in Asian trade Monday, was down 0.94% at $1.2178 at 2:15 p.m. EST (1915 GMT). The euro slid 0.42% to $1.0494, having earlier climbed to $1.0585, its highest level since June 28. The dollar index, which tracks the greenback against six peers, fell 1.4% last week, and 5% in November, its worst month since 2010. But now speculation is growing that the Fed 'pivot' narrative has run its course. "I think this issue about 'peak inflation, peak rates, peak dollar' - I think - is slowly turning into a 'persistence of inflation, a persistence of higher-for-longer interest rates," said Jane Foley, senior FX strategist at Rabobank. The dollar's aggregate positioning against G10 currencies is now neutral, and at the lowest levels since August 2021, according to ING calculations based on CFTC data. ING also believes that dollar softening may have run its course for now, given the possibility of the Fed maintaining its hawkish narrative for longer, that relaxing China's COVID restrictions could prove complicated, and that oil and gas prices could rise again. The other major factor for markets on Monday was China, where several cities have been easing their COVID restrictions. Official messaging about how dangerous the virus is also has changed following recent, unprecedented protests against the government's uncompromising "dynamic zero-COVID" strategy. This boosted China's yuan, and the dollar fell below 7.0 yuan in offshore trade for the first time since mid September, and was last at 6.9767. You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Dollar gains broadly as upbeat US data muddles Fed rate hike views

The Japanese yen continue to lose ground as it went past the 150-mark against the United States dollar on Thursday – the highest since 1990. It has been a tough time for the Japanese economy as the currency has weakened quite a bit and it has prompted an emergency Bank of Japan meeting.

The last time when the Yen breached the 160-mark was way back in 1986.

Also read |&nbsp;<a href="https://www.wionews.com/world/will-never-get-used-to-war-says-zelensky-526949">Zelensky appeals for moderate use as electricity restrictions kick-in</a>

In the past few weeks, the Bank of Japan has maintained that they will not be following the example of most central banks around the world in increasing their interest rates in order to combat the inflation. But experts believe that the recent events can lead to a slight change in their stance.

Japanese Finance Minister Shunichi Suzuki expressed his concern regarding the situation and added that the government will take “appropriate steps against excess volatility.”

“Recent rapid and one-sided yen declines are undesirable. We absolutely cannot tolerate excessively volatile moves driven by speculative trading,” he told Reuters in an interview.

Also read |&nbsp;<a href="https://www.wionews.com/world/global-economy-live-musk-looking-forward-to-a-record-breaking-q4-at-tesla-526938" hreflang="en">Global Economy LIVE | Japanese yen attains lowest value in decades</a>

While the Bank of Japan did not raise the interest rates, the government has tried to strengthen the economy through various measures, but they have failed the stabilise the currency till now.

A major step taken by the government was to sell unlimited amount of bonds to the central bank which will allow the debt yields to remain static at 0.25 per cent. The Bank of Japan will also buy $666.98 million worth of government bonds with maturities between 10 and 20 years.

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The Japanese yen continue to lose ground as it went past the 150-mark against the United States dollar on Thursday – the highest since 1990. It has been a tough time for the Japanese economy as the currency has weakened quite a bit and it has prompted an emergency Bank of Japan meeting.

The Japanese yen continue to lose ground as it went past the 150-mark against the United States dollar on Thursday – the highest since 1990. It has been a tough time for the Japanese economy as the currency has weakened quite a bit and it has prompted an emergency Bank of Japan meeting. The last time when the Yen breached the 160-mark was way back in 1986. Also read | Zelensky appeals for moderate use as electricity restrictions kick-in In the past few weeks, the Bank of Japan has maintained that they will not be following the example of most central banks around the world in increasing their interest rates in order to combat the inflation. But experts believe that the recent events can lead to a slight change in their stance. Japanese Finance Minister Shunichi Suzuki expressed his concern regarding the situation and added that the government will take “appropriate steps against excess volatility.” “Recent rapid and one-sided yen declines are undesirable. We absolutely cannot tolerate excessively volatile moves driven by speculative trading,” he told Reuters in an interview. Also read | Global Economy LIVE | Japanese yen attains lowest value in decades While the Bank of Japan did not raise the interest rates, the government has tried to strengthen the economy through various measures, but they have failed the stabilise the currency till now. A major step taken by the government was to sell unlimited amount of bonds to the central bank which will allow the debt yields to remain static at 0.25 per cent. The Bank of Japan will also buy $666.98 million worth of government bonds with maturities between 10 and 20 years.

Japanese yen hits 150-mark against US dollar - worst since August 1990

Gold prices rose more than 1% on Monday after declines in the previous two sessions, as the US&nbsp;dollar and treasury yields faltered, although risks from looming Federal Reserve interest rate hikes persisted.

Spot gold was up 0.9% at $1,656.25 per ounce by 1:41 p.m. ET (1741 GMT), having risen more than 1% earlier in the session and moving away from the more than two-week low touched in the last session.

US&nbsp;gold futures settled 0.9% higher at $1,664.

"The dollar's significantly lower ... yields are ticking lower," said Bob Haberkorn, senior market strategist at RJO Futures, who also noted some "safe-haven demand with heightened geopolitical risks."

Making bullion less expensive for overseas buyers, the dollar slipped 1.1%, while Treasury yields also retreated.&nbsp;

However, it's going to be "a struggle for gold to rally even though there's a lot of question marks out in the world. Investors want safety, but it's hard not to go into Treasuries with rates going up as fast as they are," Haberkorn added.

Gold faces headwinds as the Fed is expected to continue on its rate-hiking trajectory and increase its benchmark overnight interest rate by at least 75 basis points at its next policy meeting in November to curb stubbornly high inflation.

Gold prices have fallen 20% since scaling above the key $2,000 per-ounce level in March.

Even though gold is seen as a hedge against inflation, rising interest rates dim the appeal of the non-yielding asset.

"In the near term, however, the recovery in risk assets bolstered by signs of stabilising gilts is raising pressure on precious metal shorts, but gold prices need to break above $1,750/oz to extend the short squeeze," TD Securities said in a note.

Elsewhere, spot silver climbed 2.5% to $18.72 per ounce after posting eight consecutive daily losses. Platinum rose 1.7% to $913.77 and palladium added 0.6% to $1,998.82.

"A surplus palladium market in 2023 should ultimately lead to lower palladium prices, although near term the market remains tight," Heraeus Precious Metals said in a note.

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Gold prices rose more than 1% on Monday after declines in the previous two sessions, as the US dollar and treasury yields faltered, although risks from looming Federal Reserve interest rate hikes persisted.

Gold prices rose more than 1% on Monday after declines in the previous two sessions, as the US dollar and treasury yields faltered, although risks from looming Federal Reserve interest rate hikes persisted. Spot gold was up 0.9% at $1,656.25 per ounce by 1:41 p.m. ET (1741 GMT), having risen more than 1% earlier in the session and moving away from the more than two-week low touched in the last session. US gold futures settled 0.9% higher at $1,664. "The dollar's significantly lower ... yields are ticking lower," said Bob Haberkorn, senior market strategist at RJO Futures, who also noted some "safe-haven demand with heightened geopolitical risks." Making bullion less expensive for overseas buyers, the dollar slipped 1.1%, while Treasury yields also retreated. However, it's going to be "a struggle for gold to rally even though there's a lot of question marks out in the world. Investors want safety, but it's hard not to go into Treasuries with rates going up as fast as they are," Haberkorn added. Gold faces headwinds as the Fed is expected to continue on its rate-hiking trajectory and increase its benchmark overnight interest rate by at least 75 basis points at its next policy meeting in November to curb stubbornly high inflation. Gold prices have fallen 20% since scaling above the key $2,000 per-ounce level in March. Even though gold is seen as a hedge against inflation, rising interest rates dim the appeal of the non-yielding asset. "In the near term, however, the recovery in risk assets bolstered by signs of stabilising gilts is raising pressure on precious metal shorts, but gold prices need to break above $1,750/oz to extend the short squeeze," TD Securities said in a note. Elsewhere, spot silver climbed 2.5% to $18.72 per ounce after posting eight consecutive daily losses. Platinum rose 1.7% to $913.77 and palladium added 0.6% to $1,998.82. "A surplus palladium market in 2023 should ultimately lead to lower palladium prices, although near term the market remains tight," Heraeus Precious Metals said in a note. You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Gold up about 1 per cent after falling 20% as US dollar, treasury yields falter

Many financial institutions have predicted that the world is headed for another recession.

As rising inflation leads to a hike in interest rates, companies across the world have announced a freeze in hiring and planning to downsize their staff.

On Tuesday, the United Nations warned of an impending global slowdown that may likely be worse than the financial crisis in 2008 and the COVID-19 shock in 2020.

In its Trade and Development Report 2022, the UN Conference on Trade and Development (UNCTAD) warned that the world is “on the edge of a recession” and developing nations like those in Asia could bear the brunt of it.

It said that monetary and fiscal policies in advanced economies — including continued interest rate hikes — could push the world towards a global recession and stagnation.

Economists have given a myriad of reasons for the current recession predictions. Here are some of the five key indicators that suggest a lull in the economy worldwide.

US dollar

The US dollar has been surging for the past few months. It’s now the strongest it has been in two decades, and experts believe the value will grow even stronger in the coming days.

But this surge in the value of the power of the greenback is agitating the economies and markets worldwide, and creating winners and losers.

Though a strong dollar bodes well for the Americans, the consequences are faced by other countries, especially the developing ones.

The rise of US dollar has led to a decline in the value of UK pound, the euro, China’s yuan, Japan’s yen, India’s rupee and many others.

As a result, it makes it more expensive for these nations to import essential items like food and fuel.

In response, central banks in a bid to fight surging inflation and to shore up the value of their own currencies end up raising rates higher

US economy faltering

The key driver of the US economy is shopping. They live by the motto ‘shop till you drop’.

But recently, their spending amount has taken a massive hit. And the reason is linked to the US Fed rate hike.

The central bank has raised interest rates at a historic pace, making mortgage rates to the highest level in decades, and clipping the wings of the business. &nbsp;

Though the Fed hikes rates to taper down inflation, it gives a short-term shock to consumers whose borrowing power decreases for a brief period.

Corporate America tightens purse strings

Though the business prospered in 2020 despite the Covid shocks thanks to the American spenders, it has not been smooth sailing for the past few months, especially in the wake of the Russian invasion of Ukraine, reports CNN.

In mid-September, FedEx, which operates in more than 200 countries and whose performance signals the strength of the market, revised its outlook.

It warned that demand was softening, and earnings were likely to take a hit by more than 40 per cent.

Moreover, last week, Apple cut back on its production of the iPhone 14 after assessing subdued demand. &nbsp;The move took a toll on its shares as it fell by 4 per cent.

Bear makes an entry into Wall Street

According to CNN, Wall Street is now on track for its worst year since 2008.

After inflation set in, the Fed raised interest rates giving a brutal blow to the stock market.

The S&amp;P 500, the broadest measure of Wall Street —&nbsp;and the index responsible for the bulk of Americans’ 401(k)s — is down nearly 24 per cent for the year. Moreover, all three major US indexes are&nbsp;in bear markets— down at least 20 per cent from their most recent highs.

A similar situation has arisen in Europe, where the bond yields are spiking as central banks follow the Fed’s lead in raising rates to shore up their own currencies.

War and inflation

The Russia-Ukraine war and the resultant inflation spike have caused the most harm to the people of the United Kingdom&nbsp;

The UK has been struggling with surging prices since COVID-19, followed by the trade disruptions created by Russia’s invasion of Ukraine.

After the West imposed sanctions on Russian gas, energy prices have soared and supplies have dwindled.

The Britishers, who are grappling with the cost-of-living crisis with 10 per cent inflation, are raising concerns over higher borrowing costs that make millions of homebuyers’ monthly mortgage payments go up by hundreds or even thousands of pounds, reports CNN.

When would recession hit?

While there is a general consensus on the impending global recession, many analysts predict it to happen sometime in 2023. But, no one has predicted how severe it will be or how long it will last.

(With inputs from agencies)

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Many financial institutions have predicted that the world is headed for another recession. As rising inflation leads to a hike in interest rates, companies across the world have announced a freeze in hiring and planning to downsize their staff.

Many financial institutions have predicted that the world is headed for another recession. As rising inflation leads to a hike in interest rates, companies across the world have announced a freeze in hiring and planning to downsize their staff. On Tuesday, the United Nations warned of an impending global slowdown that may likely be worse than the financial crisis in 2008 and the COVID-19 shock in 2020. In its Trade and Development Report 2022, the UN Conference on Trade and Development (UNCTAD) warned that the world is “on the edge of a recession” and developing nations like those in Asia could bear the brunt of it. It said that monetary and fiscal policies in advanced economies — including continued interest rate hikes — could push the world towards a global recession and stagnation. Economists have given a myriad of reasons for the current recession predictions. Here are some of the five key indicators that suggest a lull in the economy worldwide. US dollar The US dollar has been surging for the past few months. It’s now the strongest it has been in two decades, and experts believe the value will grow even stronger in the coming days. But this surge in the value of the power of the greenback is agitating the economies and markets worldwide, and creating winners and losers. Though a strong dollar bodes well for the Americans, the consequences are faced by other countries, especially the developing ones. The rise of US dollar has led to a decline in the value of UK pound, the euro, China’s yuan, Japan’s yen, India’s rupee and many others. As a result, it makes it more expensive for these nations to import essential items like food and fuel. In response, central banks in a bid to fight surging inflation and to shore up the value of their own currencies end up raising rates higher US economy faltering The key driver of the US economy is shopping. They live by the motto ‘shop till you drop’. But recently, their spending amount has taken a massive hit. And the reason is linked to the US Fed rate hike. The central bank has raised interest rates at a historic pace, making mortgage rates to the highest level in decades, and clipping the wings of the business. Though the Fed hikes rates to taper down inflation, it gives a short-term shock to consumers whose borrowing power decreases for a brief period. Corporate America tightens purse strings Though the business prospered in 2020 despite the Covid shocks thanks to the American spenders, it has not been smooth sailing for the past few months, especially in the wake of the Russian invasion of Ukraine, reports CNN. In mid-September, FedEx, which operates in more than 200 countries and whose performance signals the strength of the market, revised its outlook. It warned that demand was softening, and earnings were likely to take a hit by more than 40 per cent. Moreover, last week, Apple cut back on its production of the iPhone 14 after assessing subdued demand. The move took a toll on its shares as it fell by 4 per cent. Bear makes an entry into Wall Street According to CNN, Wall Street is now on track for its worst year since 2008. After inflation set in, the Fed raised interest rates giving a brutal blow to the stock market. The S&P 500, the broadest measure of Wall Street — and the index responsible for the bulk of Americans’ 401(k)s — is down nearly 24 per cent for the year. Moreover, all three major US indexes are in bear markets— down at least 20 per cent from their most recent highs. A similar situation has arisen in Europe, where the bond yields are spiking as central banks follow the Fed’s lead in raising rates to shore up their own currencies. War and inflation The Russia-Ukraine war and the resultant inflation spike have caused the most harm to the people of the United Kingdom The UK has been struggling with surging prices since COVID-19, followed by the trade disruptions created by Russia’s invasion of Ukraine. After the West imposed sanctions on Russian gas, energy prices have soared and supplies have dwindled. The Britishers, who are grappling with the cost-of-living crisis with 10 per cent inflation, are raising concerns over higher borrowing costs that make millions of homebuyers’ monthly mortgage payments go up by hundreds or even thousands of pounds, reports CNN. When would recession hit? While there is a general consensus on the impending global recession, many analysts predict it to happen sometime in 2023. But, no one has predicted how severe it will be or how long it will last. (With inputs from agencies) WATCH WION LIVE HERE:

Five signs why global economy is headed for recession

News agency Reuters on Thursday (September 29) reported that China is stepping up efforts to stem the yuan's descent.&nbsp;Citing four sources with knowledge of the matter, it reported that China's central bank has asked major state-owned banks to be prepared to sell dollars for the local unit in offshore markets.

In order to review their holdings of the offshore yuan, state banks were told to ask their offshore branches. The Chinese currency looks set for its biggest annual loss since 1994 as it has lost more than 11 per cent to the dollar so far this year.

Raising concerns about domestic sentiment and potential capital outflows, the yuan's depreciation has been gradual and in line with the decline in major currencies against a dollar buoyed by aggressive Federal Reserve monetary tightening.

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Dwarfing the volumes traded on the mainland, the offshore yuan moves in lock-step with the onshore unit, but its trading volumes account for about 70 per cent of all yuan trades globally.

Although the total amount of dollar selling is yet to be determined, sources said the intervention plan involved using state lenders' dollar reserves primarily.

As the yuan's movements are largely dependent on dollar moves and the Fed's tightening trajectory, Chinese authorities have intervened in the past in the offshore yuan market to steer the yuan.

After a one-off 2 per cent devaluation in 2015 that roiled global financial markets, China burnt through $1 trillion of its official forex reserves to prop up the currency.

Through persistently setting firmer-than-expected mid-point fixings, the latest proposal follows other steps authorities have taken to put a floor under the yuan.

By increasing the cost of shorting the currency by lowering the amount of foreign exchange financial institutions to reinstating risk-reserve requirements on currencies purchased through forwards, the People's Bank of China has also rolled out policy measures this month.

While they sought to steer and defend the weakening currency, Chinese monetary authorities told local banks to revive a yuan fixing tool it abandoned two years ago.

(With inputs from agencies)

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News agency Reuters on Thursday (September 29) reported that China is stepping up efforts to stem the yuan's descent. Citing four sources with knowledge of the matter, it reported that China's central bank has asked major state-owned banks to be prepared to sell dollars for the local unit in offshore markets.

News agency Reuters on Thursday (September 29) reported that China is stepping up efforts to stem the yuan's descent. Citing four sources with knowledge of the matter, it reported that China's central bank has asked major state-owned banks to be prepared to sell dollars for the local unit in offshore markets. In order to review their holdings of the offshore yuan, state banks were told to ask their offshore branches. The Chinese currency looks set for its biggest annual loss since 1994 as it has lost more than 11 per cent to the dollar so far this year. Raising concerns about domestic sentiment and potential capital outflows, the yuan's depreciation has been gradual and in line with the decline in major currencies against a dollar buoyed by aggressive Federal Reserve monetary tightening. × Dwarfing the volumes traded on the mainland, the offshore yuan moves in lock-step with the onshore unit, but its trading volumes account for about 70 per cent of all yuan trades globally. Although the total amount of dollar selling is yet to be determined, sources said the intervention plan involved using state lenders' dollar reserves primarily. As the yuan's movements are largely dependent on dollar moves and the Fed's tightening trajectory, Chinese authorities have intervened in the past in the offshore yuan market to steer the yuan. After a one-off 2 per cent devaluation in 2015 that roiled global financial markets, China burnt through $1 trillion of its official forex reserves to prop up the currency. Through persistently setting firmer-than-expected mid-point fixings, the latest proposal follows other steps authorities have taken to put a floor under the yuan. By increasing the cost of shorting the currency by lowering the amount of foreign exchange financial institutions to reinstating risk-reserve requirements on currencies purchased through forwards, the People's Bank of China has also rolled out policy measures this month. While they sought to steer and defend the weakening currency, Chinese monetary authorities told local banks to revive a yuan fixing tool it abandoned two years ago. (With inputs from agencies) Watch WION's live TV here: ×

China stepping up efforts to stem the yuan's descent: Report

China’s currency yuan slipped to a 14-year low against the US dollar and also hit a record low in the international trading market on Wednesday, despite the country’s central bank’s best efforts to stem the flow.

The Chinese currency fell to 7.2 to the dollar in the international market for the time since a separate currency trading system was established outside mainland China over a decade ago.

In the onshore markets as well, the yuan depreciated to 7.2 to the dollar, its lowest level since January 2008.

The People’s Bank of China issued a statement on Wednesday evening in a bid the calm the nerves of the investors, stating that it is strictly monitoring the market movements.

“The foreign exchange market is of great importance, and maintaining its stability is the top priority,” it stated.

The bank urged investors not to bet on the unilateral appreciation or depreciation of the yuan, and called on regional banks to curb such activity.

It also said some companies have been engaging in currency speculation or flouting regulations, without giving details.

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The yuan “has withstood the test of many rounds of external shocks…You will lose if you keep betting”, it said.

The slide of the Chinese currency follows the US interest rate hikes which prompted traders to convert money into dollars in search of higher returns.

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A weaker currency generally augurs well for the Chinese exporters as it makes goods cheaper abroad, but it can also lead to investors pulling their money out of the country.

Apart from China, there have been many Asian markets which saw their currency fall against the dollar, after US Fed hiked interest rates.

Last week, the Bank of Japan intervened to support the yen for the first time since 1998, after the currency weakened against the dollar.

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China’s currency yuan slipped to a 14-year low against the US dollar and also hit a record low in the international trading market on Wednesday, despite the country’s central bank’s best efforts to stem the flow.

China’s currency yuan slipped to a 14-year low against the US dollar and also hit a record low in the international trading market on Wednesday, despite the country’s central bank’s best efforts to stem the flow. The Chinese currency fell to 7.2 to the dollar in the international market for the time since a separate currency trading system was established outside mainland China over a decade ago. In the onshore markets as well, the yuan depreciated to 7.2 to the dollar, its lowest level since January 2008. The People’s Bank of China issued a statement on Wednesday evening in a bid the calm the nerves of the investors, stating that it is strictly monitoring the market movements. “The foreign exchange market is of great importance, and maintaining its stability is the top priority,” it stated. The bank urged investors not to bet on the unilateral appreciation or depreciation of the yuan, and called on regional banks to curb such activity. It also said some companies have been engaging in currency speculation or flouting regulations, without giving details. Also read | As pound slips, Bank of England steps in to buy bonds and restore parity The yuan “has withstood the test of many rounds of external shocks…You will lose if you keep betting”, it said. The slide of the Chinese currency follows the US interest rate hikes which prompted traders to convert money into dollars in search of higher returns. Also read | Pound hits all-time low against dollar as Liz Truss' tax cuts come under pressure A weaker currency generally augurs well for the Chinese exporters as it makes goods cheaper abroad, but it can also lead to investors pulling their money out of the country. Apart from China, there have been many Asian markets which saw their currency fall against the dollar, after US Fed hiked interest rates. Last week, the Bank of Japan intervened to support the yen for the first time since 1998, after the currency weakened against the dollar. WATCH WION LIVE HERE:

China’s yuan slides to record 14-year low against US dollar

After the aggressive 75 basis points hike in interest rates by the US federal reserve, central banks across the globe hiked their key lending rates which sent jitters across the market. Rupee also touched all-time low against dollar.

US Fed rate hike sends jitters; dollar gains strength against other currencies

The rupee depreciated 44 paise and slipped below the 81-mark against the US dollar for the first time ever in early trade on Friday, weighed down by the strong American currency and risk-off sentiment among investors.&nbsp;

Forex traders said escalation of geopolitical risk in&nbsp;Ukraine&nbsp;and rate hikes by the US&nbsp;Fed&nbsp;and Bank of&nbsp;England&nbsp;in a bid to contain&nbsp;inflation&nbsp;sapped risk appetite.&nbsp;

Further, the strength of the American currency in the overseas market, a negative trend in domestic equities, and risk-off moods amid escalation of geopolitical risk in Ukraine weighed on the local unit.&nbsp;

At the interbank foreign exchange, the rupee opened at 81.08 against the greenback, then fell further to 81.23, registering a fall of 44 paise over its previous closing.&nbsp;

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On Thursday, the rupee plunged by 83 paise — its biggest single-day loss in nearly seven months — to close at an all-time low of 80.79 against the US dollar.&nbsp;

The&nbsp;Bank of England hiked&nbsp;its base rate by 50 basis points (bps) to a 14-year high of 2.25 per cent.&nbsp;

The Bank of Japan intervened in the FX market for the&nbsp;first time in 24 years&nbsp;to stem a falling Yen after it kept rates at record lows, IFA Global Research Academy said, adding that the Swiss National Bank hiked rates by a record 75 bps to 0.5 per cent.&nbsp;

The US Fed has hiked interest rates by 75 basis points to 3-3.25 per cent.&nbsp;

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On Thursday, RBI was conspicuous by its absence from the spot market as the rupee fell by 1 per cent possibly as it wanted the rupee to do the catching up, said Anil Kumar Bhansali, head of rreasury, Finrex Treasury Advisors.&nbsp;

“All major events are over for this month as we await RBI’s MPC to give its verdict on September 30, 2022,” Bhansali added.&nbsp;

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.05 per cent to 111.41.&nbsp;

Global oil benchmark Brent crude futures fell 0.57 per cent to USD 89.94 per barrel.&nbsp;

On the domestic equity market front, the 30-share&nbsp;BSE Sensex was trading&nbsp;558.59 points or 0.94 per cent down at 58,561.13, while the broader NSE Nifty fell 153.10 points or 0.87 per cent to 17,476.70.&nbsp;

Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth Rs 2,509.55 crore, as per exchange data.&nbsp;

The rupee depreciated 44 paise and slipped below the 81-mark against the US dollar for the first time ever in early trade on Friday, weighed down by the strong American currency and risk-off sentiment among investors.

The rupee depreciated 44 paise and slipped below the 81-mark against the US dollar for the first time ever in early trade on Friday, weighed down by the strong American currency and risk-off sentiment among investors. Forex traders said escalation of geopolitical risk in Ukraine and rate hikes by the US Fed and Bank of England in a bid to contain inflation sapped risk appetite. Further, the strength of the American currency in the overseas market, a negative trend in domestic equities, and risk-off moods amid escalation of geopolitical risk in Ukraine weighed on the local unit. At the interbank foreign exchange, the rupee opened at 81.08 against the greenback, then fell further to 81.23, registering a fall of 44 paise over its previous closing. Also read | Indian External Affairs Minister S Jaishankar attends BRICS ministerial meet on sidelines of UNGA On Thursday, the rupee plunged by 83 paise — its biggest single-day loss in nearly seven months — to close at an all-time low of 80.79 against the US dollar. The Bank of England hiked its base rate by 50 basis points (bps) to a 14-year high of 2.25 per cent. The Bank of Japan intervened in the FX market for the first time in 24 years to stem a falling Yen after it kept rates at record lows, IFA Global Research Academy said, adding that the Swiss National Bank hiked rates by a record 75 bps to 0.5 per cent. The US Fed has hiked interest rates by 75 basis points to 3-3.25 per cent. Also read | UN memo says Pakistan should suspend debt repayments: Reports On Thursday, RBI was conspicuous by its absence from the spot market as the rupee fell by 1 per cent possibly as it wanted the rupee to do the catching up, said Anil Kumar Bhansali, head of rreasury, Finrex Treasury Advisors. “All major events are over for this month as we await RBI’s MPC to give its verdict on September 30, 2022,” Bhansali added. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.05 per cent to 111.41. Global oil benchmark Brent crude futures fell 0.57 per cent to USD 89.94 per barrel. On the domestic equity market front, the 30-share BSE Sensex was trading 558.59 points or 0.94 per cent down at 58,561.13, while the broader NSE Nifty fell 153.10 points or 0.87 per cent to 17,476.70. Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth Rs 2,509.55 crore, as per exchange data.

Indian rupee hits new low, slips below 81-mark against US dollar for the first time ever

How the strong US dollar can affect everyone

On Friday, the Japanese yen experienced the biggest decline against a strengthening U.S. dollar as a two-day rise in stocks acknowledged market expectations that the Fed will need to take additional action to keep inflation under control. That realization came after a number of Federal Reserve officials cautioned investors not to be overconfident following this week's minor easing in inflation numbers in speeches and statements.

The most recent example was San Francisco Fed President Mary Daly, who stated on Thursday that a rate increase of 50 basis points in September "makes sense" in light of recent economic data, especially data on inflation, but she is willing to raise the rate if necessary.

Thursday saw a decline in the Nasdaq and S&amp;P 500 amid further indications of slowing inflation. The euro fell to $1.0311 while the dollar index increased by 0.1% to 105.210. The Japanese yen lost 0.12% to 133.19 per dollar, and the last known price of sterling was $1.2184, down 0.23% from the previous day. The euro increased 0.05% to 137.340 yen. Even the New Zealand dollar, which is expected to have a significant rate increase next week, decreased 0.16% to $0.643 against the US dollar.

According to data released on Thursday, U.S. producer prices (PPI) unexpectedly declined in July due to a decrease in the price of energy items. That came after the shocking report on Wednesday that the consumer price index (CPI) was unchanged in July as a result of a decline in gasoline costs.

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While such information sparked a brief relief bounce in markets concerned about the Fed's accelerated tightening course, it was fleeting. The tech-heavy Nasdaq has just recovered from mid-June lows, but it is still down nearly 18% for the year. Along with the 225 basis points of Fed rate increases since March, the dollar index has continued to strengthen, up 10% so far this year. From Wednesday's top of 135.30 against the yen, it had dropped as low as 131.74 overnight, a one-week low. On Friday, it was back at 133.245.

(with inputs from agencies) 
&nbsp;

On Friday, the Japanese yen experienced the biggest decline against a strengthening U.S. dollar as a two-day rise in stocks acknowledged market expectations that the Fed will need to take additional action to keep inflation under control.

On Friday, the Japanese yen experienced the biggest decline against a strengthening U.S. dollar as a two-day rise in stocks acknowledged market expectations that the Fed will need to take additional action to keep inflation under control. That realization came after a number of Federal Reserve officials cautioned investors not to be overconfident following this week's minor easing in inflation numbers in speeches and statements. The most recent example was San Francisco Fed President Mary Daly, who stated on Thursday that a rate increase of 50 basis points in September "makes sense" in light of recent economic data, especially data on inflation, but she is willing to raise the rate if necessary. Thursday saw a decline in the Nasdaq and S&P 500 amid further indications of slowing inflation. The euro fell to $1.0311 while the dollar index increased by 0.1% to 105.210. The Japanese yen lost 0.12% to 133.19 per dollar, and the last known price of sterling was $1.2184, down 0.23% from the previous day. The euro increased 0.05% to 137.340 yen. Even the New Zealand dollar, which is expected to have a significant rate increase next week, decreased 0.16% to $0.643 against the US dollar. According to data released on Thursday, U.S. producer prices (PPI) unexpectedly declined in July due to a decrease in the price of energy items. That came after the shocking report on Wednesday that the consumer price index (CPI) was unchanged in July as a result of a decline in gasoline costs. Also Read: IN PICS | Trump supporters gather outside his Mar-a-Lago estate, say FBI raid a 'witch hunt' While such information sparked a brief relief bounce in markets concerned about the Fed's accelerated tightening course, it was fleeting. The tech-heavy Nasdaq has just recovered from mid-June lows, but it is still down nearly 18% for the year. Along with the 225 basis points of Fed rate increases since March, the dollar index has continued to strengthen, up 10% so far this year. From Wednesday's top of 135.30 against the yen, it had dropped as low as 131.74 overnight, a one-week low. On Friday, it was back at 133.245. (with inputs from agencies)

Japanese yen weakens against dollar fearing Fed's super-charged tightening policy

The rupee sunk to a record low of 80 per US dollar today. For seven straight sessions, the rupee has been hitting record lows. Should you be worried? How can India stabilise the rupee? Palki Sharma tells you.

Gravitas: How will India stabilise the rupee?

The Indian rupee breached 80 against the US dollar amid expectations of an aggressive rate hike by the US Federal Reserve. What explains the rupee's rapid depreciation? What does it mean for the average Indian citizen? Palki Sharma tells you.

Gravitas: Rupee's historic plunge, breaches 80 against dollar

For the first time in 20 years, the euro and the dollar have equalised, indicating that the market believes that the Russian invasion of Ukraine will cause a severe downturn in the European economy. Currently, 1 euro is equal to 1 US dollar. With the change, European businesses and consumers will pay more for the goods and services they import while seeing an immediate decrease in the price of European exports on global markets.

Since early February, when it was worth over $1.13, the value of the euro has fallen dramatically. Fear that Russia, the primary energy supplier for the EU, will entirely cut off gas deliveries in response to Western sanctions has caused the slump to pick up speed in recent weeks.

So far, 12 European Union nations have experienced a whole or partial decrease in Russian gas. For a scheduled 10-day maintenance, supplies from the Nord Stream 1 pipeline were suspended earlier this week. It is unknown whether the Kremlin will order the suspension to continue through that date and last indefinitely.

"Let's prepare for a total cut-off of Russian gas. "This is now the most likely option," Bruno Le Maire, France's finance minister, has said.

The euro will be closely watched to see if it manages to surpass the value of the US dollar. When the euro was valued at $0.99 in November 2002, this occurrence occurred last.

However, Russia's all-out assault on Ukraine has turned the tables and severely hurt the economy of the EU. Gas prices have reached record highs as a result of the invasion's disruption of the energy markets.

The unexpected shock has resulted in both a steady slowdown in economic activity and record-breaking inflation throughout the eurozone, with a total of 8.6 percent in June.

The spectre of stagflation, a perilous concoction that stunts growth while keeping things prohibitively expensive for both consumers and businesses, has returned as a result of the interaction of the two causes.

The European Central Bank has already increased interest rates in an effort to rein in inflation, and it plans to do so in the future as things get worse.

As Croatia completes the process of joining the eurozone and becomes the 20th EU member state to adopt the common currency, the euro and the dollar have reached parity. The European Commission is expected to announce a new downward revision to its updated economic outlook on Thursday.

Brussels has purposefully refrained from issuing any definitive predictions about an impending recession for the time being and is still optimistic that the eurozone will be strong enough to withstand the disruption caused by the conflict in Ukraine and the energy issue. 
&nbsp;

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For the first time in 20 years, the euro and the dollar have equalised, indicating that the market believes that the Russian invasion of Ukraine will cause a severe downturn in the European economy.

For the first time in 20 years, the euro and the dollar have equalised, indicating that the market believes that the Russian invasion of Ukraine will cause a severe downturn in the European economy. Currently, 1 euro is equal to 1 US dollar. With the change, European businesses and consumers will pay more for the goods and services they import while seeing an immediate decrease in the price of European exports on global markets. Since early February, when it was worth over $1.13, the value of the euro has fallen dramatically. Fear that Russia, the primary energy supplier for the EU, will entirely cut off gas deliveries in response to Western sanctions has caused the slump to pick up speed in recent weeks. So far, 12 European Union nations have experienced a whole or partial decrease in Russian gas. For a scheduled 10-day maintenance, supplies from the Nord Stream 1 pipeline were suspended earlier this week. It is unknown whether the Kremlin will order the suspension to continue through that date and last indefinitely. "Let's prepare for a total cut-off of Russian gas. "This is now the most likely option," Bruno Le Maire, France's finance minister, has said. The euro will be closely watched to see if it manages to surpass the value of the US dollar. When the euro was valued at $0.99 in November 2002, this occurrence occurred last. However, Russia's all-out assault on Ukraine has turned the tables and severely hurt the economy of the EU. Gas prices have reached record highs as a result of the invasion's disruption of the energy markets. The unexpected shock has resulted in both a steady slowdown in economic activity and record-breaking inflation throughout the eurozone, with a total of 8.6 percent in June. The spectre of stagflation, a perilous concoction that stunts growth while keeping things prohibitively expensive for both consumers and businesses, has returned as a result of the interaction of the two causes. The European Central Bank has already increased interest rates in an effort to rein in inflation, and it plans to do so in the future as things get worse. As Croatia completes the process of joining the eurozone and becomes the 20th EU member state to adopt the common currency, the euro and the dollar have reached parity. The European Commission is expected to announce a new downward revision to its updated economic outlook on Thursday. Brussels has purposefully refrained from issuing any definitive predictions about an impending recession for the time being and is still optimistic that the eurozone will be strong enough to withstand the disruption caused by the conflict in Ukraine and the energy issue. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

1 Euro equals 1 US dollar: For the first time in 20 years, Euro hits dollar parity

The Indian rupee crossed 79 against the US dollar amid rising fears of a recession. Agencies are predicting a Euro-zone recession in the last quarter of 2022. Are governments doing enough to curb this slowdown? Palki Sharma tells you.

Gravitas: Rupee hits record low against US dollar

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