Russia Sanctions Accelerate Risk to Dollar Dominance
By Rachel Evans Aug 6, 2014 11:51 AM ET
U.S. and European Union sanctions against Russia threaten to hasten a move away from the dollar thats been stirring since the global financial crisis.
One place the shift has become evident is Hong Kong, where dollar selling has led the central bank to buy more than $9.5 billion since July 1 to prevent its currency from rallying as the sanctions stoked speculation of an influx of Russian cash. OAO MegaFon, Russias second-largest wireless operator, shifted some cash holdings into the citys dollar. Trading of the Chinese yuan versus the Russian ruble rose to the highest on July 31 since the end of 2010, according to the Moscow Exchange.
While no ones suggesting the dollar will lose its status as the main currency of business any time soon, its dominance is ebbing. The greenbacks share of global reserves has already shrunk to under 61 percent from more than 72 percent in 2001. The drumbeat has only gotten louder since the financial crisis in 2008, an event that began in the U.S. when subprime-mortgage loans soured, and the largest emerging-market nations including Russia have vowed to conduct more business in their currencies.
The crisis created a rethink of the dollar-denominated world that we live in, said Joseph Quinlan, chief market strategist at Bank of America Corp.s U.S. Trust, which oversees about $380 billion. This nasty turn between Russia and the West related to sanctions, that can be an accelerator toward a more multicurrency world.
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http://www.bloomberg.com/news/2014-08-06/russia-sanctions-accelerate-risk-to-dollar-dominance.html
Sam1
(498 posts)Cayenne
(480 posts)Bill USA
(6,436 posts)littlemissmartypants
(22,808 posts)The last two months have been quite interesting. I'm into math and patterns. WCIS.
The dollars days are numbered?