IMF data show that central banks are subtly ditching the dollar.
Goldman Sachs reports dollar reserves slipped 4 percentage points in 2017 and 2018. Still the coin of the global realm, two-thirds of world currency reserves and securities issuance are denominated in the dollar, compared to only about 20 percent for the euro and 2.1 percent for the Chinese yuan.
Yet foreign governments are considering buying and selling oil with the euro to prevent the U.S. from intervening in foreign policy.
Just this week, Russia’s economic minister said they were taking measures to be paid in euros and robules for its energy exports. “We have a very good currency. It’s stable. Why not use it for global transactions?” He said, “We want oil and gas sales in roubles at some point.”
TREND FORECAST: Should the petrodollar be abandoned and oil be purchased by countries across the globe using their own currencies, we forecast it will be the beginning of the end of dollar dominance.
Considering the coming of the “Greatest Depression,” the euro and Chinese yuan will remain too weak to threaten a greater share of the global currency market.
In fact, there is growing discord in Europe over the monetary policy of the European Central Bank (ECB).
Infighting has erupted over restarting the ECB’s bond-buying program last month. In a leaked letter, members of a monetary policy committee advised against current measures, revealing that Germany, France, Holland, Slovenia, and Estonia were against the QE bond purchases.