The dollar is in the wind … What are the causes of historical collapse?

Testify Dollar The American is an unprecedented decline, and economists described it as the worst decades, amid a wave of violent losses that threaten its position as the most powerful currency in the world. According to what was reported by the “Emirates 24” platform, the green currency has been in its worst performance since the era of President Richard Nixon, which threatens serious global economic repercussions.

According to a report of the “CNBC” network, the dollar recorded a decrease 10.7% In front of a basket of global currencies during the month of June only, which is its worst annual performance since 1973, when Nixon officially ended the dollar’s connection to gold in the framework of the “Bretton Woods” agreement.

The main reasons behind the collapse of the dollar:

1. Internal political and economic turmoil
   The United States is witnessing a state of political confusion and internal division, which raised the doubts of investors about the future of political and economic stability in the country.
2. Financial deficit and debt accumulation
   The US federal deficit has recorded record levels, in light of the expansion of government spending and the decline in revenues, which weakens confidence in the American economy.
3. The risk of reducing interest rates
   With the decline in growth rates and the increased risk of recession, it is expected that the Federal Reserve will reduce the interest during the coming period, weakening the dollar’s attractiveness against other currencies.
4. Geopolitical tensions and tense trade relations
   The new customs threats made by US President Donald Trump Against a number of commercial partners, it increased the level of anxiety in the markets, especially in light of talking about imposing 25% fees on imports from Japan and South Korea.
5. Loss of international confidence in dollars
   With the growing use of alternative currencies in international exchanges, some international partners began to reduce their dollar reserves, which exacerbated the pressure on the American currency.

Warning of further decline

Art Hagan, the chief strategy of the market at B Raili, said:

“The dollar is facing unprecedented pressure, due to unreasonable financial policies and escalating tensions with the allies. With the increasing negative factors, it is difficult to curb this accelerated deterioration.”

What next?

If the situation continues as it is, we may be in front of:

• Roller rise in prices gold And precious minerals.
• A global trend towards diversifying the baskets of cash reserves away from the dollar.
• Increased inflation within the United States and the high cost of imports.
• Market confidence in the US economy has declined in the long term.

In front of this dark scene, attention remains to the steps of the Federal Reserve and the US government, perhaps it can stop continuous bleeding and save the dollar from complete collapse.

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