Dollar Risks Losing its Status of the World’s Leading Currency

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Context

The dollar is currently facing a severe crisis. Its exchange rate has stagnated at about $1.50 against the Euro which is quite close to the lowest point it hit before the financial meltdown. Since the start of 2011, the US currency has lost 13% versus the Euro. Given the constant decline in the dollar’s value on the currency markets, there are risks that it may lose its position as the world’s reserve currency and a benchmark unit for global trade. It is not only the Euro that will gain in importance, but analysts believe that the currencies of up-and-coming economies such as China, Brazil and India too are expected to play a bigger role in days to come, both in the investment policies of central banks and global trade.

 

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