American Dollar (USD) continues to lose strength against other currencies

josevas217 (79)modin Project HOPE • 14 days ago

Hello friends of Project HOPE, today we are beginning to see some things that turn out to be positive for the cryptocurrency market, such as the drop in inflation in the United States. Although slight, it has had a good impact on cryptocurrencies, at least in the short term, as we have seen in the price of Bitcoin.

Now, I don't want to talk in this post about what the decline in inflation meant for Bitcoin, but rather what it has meant for the dollar. Let's look at the following graph of the dollar index or DXY, whose behavior can be seen in the image that I share below, obtained as a screenshot of my account

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As can be seen, once the news of the decrease in inflation was announced, the dollar index fell considerably. Which indicates that the American dollar depreciated.

This means that expectations of interest rate cuts are increasingly greater, which indicates that the dollar will continue to fall in value. This is that, if the interest rate remains high, as it has been for a couple of years on average, the dollar continues to strengthen, because borrowing is increasingly expensive, that is, the price of money rises, but with this perspective of lowering the rate, exactly the opposite occurs.

So that theory that the value of the US dollar is going to zero, will it be true?, time will tell. Now, I would like to share with you a chart of the USDCAD currency pair, that is, the rate of the American dollar against the Canadian dollar.

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You may notice that it has dropped considerably, this means that fewer Canadian dollars are needed to buy American dollars. Which translates to a loss of value of the USD against the CAD. I know that these types of things are sometimes complex to understand, but if we also assume that the amount of international transactions that were carried out a decade ago was more than 60% in American Dollars and right now it is around 50%, the loss of strength of the US dollar.

The hegemony of the dollar, as I see it, is in a clear decline, of course, it will take decades for there to be a kind of fatal blow, considering that the majority of countries' debt is in USD, but as time progresses I do consider that all that gringo power, the one that it exercises by using the USD as a weapon, is going to increase considerably, but... who will be the next power?, many say that it will be China, but everything remains to be seen. Greetings, and take care of yourselves.