The BRICS Alliance Won’t Replace the US Dollar as the World’s Reserve Currency, Says BNY Mellon
According to BNY Mellon, the advancement of the BRICS alliance will not be enough to remove the US dollar (USD) from its position as the world’s reserve currency. The bank believes that the USD will retain its dominant status due to technological factors and the US’s dominance in that field. In a recent note, Bob Savage, head of market strategy at BNY Mellon, emphasized the importance of technology, particularly high-end computer chips, in determining the future of the USD. Despite the expansion of the BRICS alliance and its invitation to six new countries, including Argentina and Saudi Arabia, BNY Mellon remains confident in the USD’s resilience. However, while the USD maintains its position, the euro is losing ground in global trade, and the Chinese renminbi is gaining popularity in financial markets.
Hot Take: The USD’s Dominance Faces Challenges from the BRICS Alliance, but Technology Keeps It Strong
While the BRICS alliance poses a threat to the US dollar, BNY Mellon believes that technology will ensure the USD retains its global reserve status. The bank’s experts argue that high-end computer chips and the US’s dominance in technology will be crucial in determining the USD’s future. Additionally, the euro is losing ground in global trade, while the Chinese renminbi is rising in financial markets. However, BNY Mellon’s reassurances suggest that the USD’s dominance is not in immediate danger. Nevertheless, the US debt ceiling crisis, inflation, and the rise of strong competitors pose long-term challenges to the USD’s global hegemony. As the currency landscape evolves, the role of cryptocurrencies like XRP and the emergence of new alliances will continue to shape the future of global currencies.
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