( Washington, 23rd Sept 2020 ) The U.S. dollar index has rebounded recently and is back above 94 points. However, experts believe that the renminbi will erode the influence of the U.S. dollar unchanged, and it will gradually become the dominant currency in the G10 (Group of 10) currencies.
G10 is composed of countries that participated in the 1962 general loan agreement. In fact, there are 11 countries, including Belgium, the Netherlands, Canada, Sweden, France, Switzerland, Germany, the United Kingdom, Italy, the United States, and Japan. Developing countries also cover all major currencies.
HSBC senior foreign exchange strategist Dominic Bunning pointed out that the US dollar used to determine the G10 currency trend, but now it is dominated by the renminbi, especially during Asian trading hours.
He believes that the main reason is that after the COVID-19 pandemic, China is widely regarded as the only major economy that is likely to maintain growth this year. The appreciation of the renminbi is a market response to this mentality. The impact of weekly price changes is growing.
Bangning believes that China's green light on financial and currency liberalization will also make the renminbi an increasingly important reserve currency in the exchange market.
The OECD (Organization for Economic Cooperation and Development) last week raised China's estimated economic growth rate this year to 1.8%, compared with -6.8% in the first quarter of this year.
Although Sino-U.S. relations appear to have worsened as U.S. President Trump once again criticized China in the United Nations video on Tuesday, many U.S. analysts have spoken recently, acknowledging that the epidemic in the United States has not been alleviated and the second wave of epidemic in Europe has broken out again. Under the signs, there is no hope in the world's major economies except China.
Source: Zhongshi News Network
**Info & Image are taken online
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