US Dollar Could Lose Special Standing: CNBC

The US dollar may eventually lose its standing as the world’s leading reserve currency due to protectionist policies, including sanctions and tariffs, as well as policy decisions abroad. “The primary reasons for the dollar’s continued dominance are inertia and the lack of viable alternatives, neither of which U.S. policymakers should find comforting for the longer term,” explains James McCormack for CNBC. Protectionist policies may encourage traders to avoid the US dollar in settling transactions, and China and Europe are stepping up efforts to present the renminbi and euro as suitable alternatives. Reduced reliance on the US dollar could have another consequence – reducing global interest in US Treasury debt as a risk-free asset. The International Monetary Fund reports the dollar’s share of foreign reserves dropped from 73 percent in 2001 to 62 percent in 2018. – YaleGlobal

US Dollar Could Lose Special Standing: CNBC

The US shoots itself in the foot with protectionist policies, punitive sanctions and tariffs, reducing trust in the US dollar as leading reserve currency
James McCormack
Tuesday, June 18, 2019

Read the article about gradual erosion in the US dollar’s strength as the world’s reserve currency. 

A changing basket: The International Monetary Fund reviews reserve currencies every five years and added the Chinese renminbi/yuan in 2015; criterion require that currencies are freely usable and widely traded (Source: IMF)  

© 2019 CNBC LLC. All Rights Reserved.