empty
18.03.2022 08:21 AM
The winner will be determined by time: the confrontation between the dollar and the yuan

This image is no longer relevant

The question of the superiority of the American and Chinese currencies remains relevant. It is possible that the leader of the global financial market will be determined in the near future. Contrary to authoritative statements about the dominant role of the dollar, it could be the yuan.

In the global financial game, many analysts are betting on the Chinese currency. According to Chinese analyst Wang Zaibang, a representative of the Taihe Research Center, the greenback has become an "unpredictable black hole" into which the wealth of the world's wealthy people can swim at any moment. According to the analyst, the United States violated the basic principles of the capitalist economy. This situation threatens the international political and economic order.

America's negative influence is most pronounced in global oil deals. Currently, they are carried out in dollars, but the transition to settlements in yuan in oil transactions in China and Saudi Arabia will dramatically increase the international status of the yuan. According to Wang Zaibang, this will be a turning point in world politics and economics. Currently, the Chinese economy is the largest in the world in terms of purchasing power parity and continues to grow. However, in international settlements, the yuan is much inferior to both the euro and the dollar.

A number of factors play against the further dominance of the greenback, including the uncontrolled printing of fiat money, fueling inflation, and the use of USD as a way to pressure other countries. A huge amount of money has "settled" on international accounts and is in the global reserves of central banks, since most trade settlements are made in dollars. However, the dollar array will gradually decrease against the background of increased political risks that arise during transactions with the US currency.

In the past few years, the United States has "recklessly used the hegemony of the USD to release large-scale liquidity," Wang Zaibang stressed. This provoked an oversupply of dollars worldwide and increased financial risks in many countries. Washington used the hegemony of the dollar to impose sanctions on a number of states, thereby undermining the global economy. The analyst of the Taihe Research Center is confident that the internationalization of the Chinese currency can weaken the influence of the US one.

However, the greenback does not intend to give up without a fight. In favor of the USD is its "linking" to international trade settlements. The need to pay in dollars throughout the world gives the greenback undeniable advantages. Previously, the euro claimed the leading role among the currencies, and now the yuan has been added to it. The financial ambitions of the latter are facilitated by the steady growth of the Chinese economy and the growing influence of China on global economic and geopolitical processes.

In the long-term planning horizon, trading in the commodity and stock markets will be carried out in dollars. However, then USD will face the problem of maintaining its dominant status. At the same time, instead of two key currencies - the dollar and the euro - five leaders will appear on the market: the yuan, the ruble and the rupee, experts predict. Wang Zaibang also admits such a development of events, focusing on the multipolarity of the international monetary system. Against this background, the internationalization of the yuan is a natural phenomenon, the Taihe analyst emphasizes.

Larisa Kolesnikova,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Iran attacks exacerbate oil crisis: S&P 500 freezes ahead of key US data

US attacks on Iran raise concerns about oil, retaliation S&P 500 near February highs but showing signs of stagnation Rising oil prices raise concerns about inflation, Fed policy Investors look

Thomas Frank 12:44 2025-06-23 UTC+2

US Market News Digest for June 23

Geopolitical tensions weigh on markets Investors remain cautious amid escalating Middle East tensions, awaiting potential Iranian retaliation. While market reactions have been muted so far, further conflict escalation could trigger

Ekaterina Kiseleva 12:31 2025-06-23 UTC+2

Supply risks fuel oil, Asia gains, dollar stays afloat

Asian stock markets rise on Friday Oil hovers near 4-1/2-month peak on supply shock risks Dollar resilient on safe-haven demand despite mixed signals from Fed Swiss franc steady after

Thomas Frank 10:55 2025-06-20 UTC+2

Investors confused: data weak, policy hawkish, hopes pinned on bonds

Treasury yields pared earlier losses after Fed Chair Powell's remarks. Middle East tensions linger as Iranian leader rebuffs Trump's surrender demands. Swiss National Bank cuts rates to zero. Stora Enso

14:05 2025-06-19 UTC+2

Investors are confused: data is weak, policy is aggressive, hope is in bonds

Treasury yields pare previous losses after Fed Chairman Powell's speech Middle East concerns remain Iranian leader rejects Trump's demand for capitulation Swiss National Bank cuts interest rates to zero Stora

Thomas Frank 13:58 2025-06-19 UTC+2

Crypto market unaffected by Fed's policy decision. Bitcoin adamant to hit $205,000 by year end

Following yesterday's Federal Reserve meeting, where the central bank kept its benchmark rate unchanged, markets showed little reaction. Stock indices remained within their current ranges, and Bitcoin avoided sharp price

Larisa Kolesnikova 10:45 2025-06-19 UTC+2

Bitcoin still immune to geopolitical tensions, but military conflicts could rattle crypto market

According to analysts, the ongoing military conflict between Israel and Iran could have a significant impact on the digital asset space. In case of a negative outcome, the crypto market

Larisa Kolesnikova 14:08 2025-06-18 UTC+2

Futures trading with gains while markets in limbo. Market participants respond to Fed's signals and geopolitics

Futures contracts rise: Dow +0.21%, S&P 500 +0.28%, and Nasdaq +0.35%. Markets await Fed's policy decision. Swedish central bank cuts interest rate. Airbus lifts dividend target, boosting shares. Gerresheimer jumps

13:47 2025-06-18 UTC+2

Futures up as world on edge: Markets react to Fed cues, geopolitics

Futures up: Dow 0.21%, S&P 500 0.28%, Nasdaq 0.35% Fed policy decision expected; Sweden cuts interest rates Airbus raises dividend target, boosts shares Gerresheimer gains on potential takeover talks with

Thomas Frank 13:45 2025-06-18 UTC+2

US Market News Digest for June 17

Tensions in the US stock market are rising as the conflict between Israel and Iran intensifies. Analysts warn that a potential full-scale war could trigger a 20% drop

Ekaterina Kiseleva 13:25 2025-06-17 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.