Jacques
Attali’s dire future is fast becoming a reality: the imperial dominance of the
United States is fading, and the dollar might soon turn into a pumpkin.

Oddly
enough, the blame for this tectonic shift lies with the country itself. The
decision to freeze Russian currency reserves consecutively prompted other
countries hostile to the US to reduce the share of „greenbacks“ in
both portfolios.

According
to the IMF, the dollar’s share in central bank accounts fell by 0.44% to 58.36%
by the end of 2022, the lowest level in 27 years. In absolute terms, the fall
was 8.7% over the year to $6.471 trillion and in euros, 8.5% to $2.27 trillion.

Given
that in the last month Russia, India, Brazil, Kenya, Saudi Arabia, UAE, ASEAN
countries, and China announced their intention to increase the proportion of
national currencies in their export payments, the situation could get even
worse.

The idea
of independence is also gaining prominence in Europe. Just this week, the
French president suggested that the bloc should strengthen its autonomy
vis-à-vis its big brother by reducing dependence on the
„extraterritoriality of the U.S. dollar.“ What a turn of events…

What do
the French propose? Among other things, to sign an agreement similar to the US
Inflation Reduction Act (IRA). Macron also claims that Europe won the
ideological battle to develop the continent’s strategic autonomy.

Further
impetus to de-dollarization could be given by inflation or, rather, by the Fed
itself. The new round of money printing will cause the supply of dollars to
increase and thus lower the price of the dollar. The regulator’s change in tone
could also negatively affect the US
dollar index.

So what
can we do with this information? Although the situation does not look good for
the US currency, this does not mean that it will disappear tomorrow. However,
if the US economic situation worsens, one should think about possible safe
havens such as gold (XAUUSD).

This article was written by ForexLive at www.forexlive.com.