Monday 2 July 2018

The trade war threatens the reserve status of the dollar

The danger of a trade war between the US and China is again on the agenda. And this may play a bad joke to the appreciation of the dollar against other major currencies, according to analysts.
Moreover, President Trump's protectionist policy threatens the status of the US dollar as the main reserve currency.
The US has already introduced steel and aluminum duty and threatens to do so with other Chinese and European goods. Meanwhile, the two parties concerned are expected to take reciprocal action.
The use of the dollar has long brought about serious risks for countries like China, as witnessed by turbulence caused in the country in 2009 by the financial crisis.
China Central Bank, again warned of avoiding the dollar in 2013.
Otherwise, history shows that in a trade war, the dollar has seen a serious depreciation against other major currencies.
In view of the current strong increase in green money over the rest of the major currencies, the time to shorten the dollar appears to be quite appropriate.


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