Photo: Eugene biyatov / RIA Novosti
The dollar in the foreseeable future could lose its status as the world’s reserve currency, which will lead to the weakening of the American currency in the medium term. This opinion was expressed by analyst of investment Bank JP Morgan Chase Craig Cohen.
The reason for the loss of a dollar of its status may be that the driver of global economic growth has shifted to Asia. “China is in the midst of this recent economic shift, caused by the rapid development of the country and the commitment to the domestic reforms,” notes Cohen.
Over the last 70 years China has increased its share in the world GDP quadrupled, to nearly 20 percent (almost the same as in the USA). The country has evolved from a manufacturer of cheap goods into the country with a developed technological market. In this regard, analysts predict that in the coming decades, the global economy will shift from dominance of the U.S. dollar to the system in which more power has Asia. As a result, the dollar will fall against a basket of other currencies, including gold.
Change the dominant world currency is a natural process that has occurred many times throughout history, noted Cohen. So, before the Second world war was not backing the U.S. currency and the British pound.
Earlier it was reported that the President of the United States Donald trump decided to weaken the dollar. A cheaper currency may stimulate U.S. economy and that may play into the hands of Trump, who was going to go for a second term. But it can also jeopardize the status of the dollar as the world reserve currency and trigger a currency war.
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