As the BRICS alliance steps up its dedollarization efforts, the success of this initiative remains uncertain. Although several countries are considering joining or are already joining this movement, the supremacy of the US dollar remains uncontested. Indeed, despite the coordinated efforts of BRICS member countries, the dollar continues to outperform the currencies of these nations.
The supremacy of the American dollar against BRICS currencies
The US dollar displays overwhelming dominance over the currencies of the BRICS countries as evidenced by the DXY. This stock index which measures the value of the American currency against six other foreign currencies is currently at 106.22 points. This is a significant increase from its lowest level of 101.8 points last January.
If the US dollar is clearly increasing, the same cannot be said for the yuan. The Chinese currency fell to its lowest level in five months and stands at 7.24 points against the dollar.
The Indian rupee is not left out. The currency of this influential member of the BRICS achieved one of its worst performances by reaching 83.63 points at the start of last week. It finally experienced a slight rebound and stood at 83.54 points.
Finally, the Russian ruble also recorded a sharp devaluation, falling below 100 points and positioning itself at 94.15 against the US dollar. This value reflects the difficult period that the Russian economy is going through, impacted by international sanctions and growing instability.
Other local currencies outclassed by the dollar
The Japanese yen suffered from the impact of the strength of the dollar and fell to its lowest level since 1990. The dramatic fall of this currency demonstrates the difficulty for Japan to compete with the strength of the American dollar. This decline negatively affects the country's economy, especially in sectors dependent on exports.
The pound sterling has also been weakened by the powerful dollar. It is currently around $1.25, its lowest level in four months. A decline which reflects the current economic and political uncertainties in Great Britain.
The dollar continues to dominate the foreign exchange markets, significantly influencing the economies of several countries. Despite dedollarization initiatives, the American currency has demonstrated remarkable resilience and power and does not intend to lose ground in its battle against the BRICS.
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