- The U.S. dollar has maintained its supremacy in the forex markets by outperforming all 11 BRICS currencies, underlining its dominant position as the world’s leading reserve currency.
- Bitcoin, designed to serve as a hedge against traditional financial systems, could gain increased attention, especially among BRICS nations.
Over the past three months in the forex markets, the U.S. dollar has demonstrated its supremacy by outperforming all 11 BRICS currencies. Despite BRICS nations’ efforts to challenge the U.S. dollar’s status as the world’s reserve currency by promoting their local currencies for international trade, they have found themselves with weakened currencies when measured against the USD. Notably, the U.S.
The dollar has not only surpassed BRICS currencies but has also outshone gold, oil, and various other commodities on the global stage.
This development underscores the dominant position of the USD in foreign exchange markets when compared to other local currencies. Additionally, the U.S. dollar has exerted such influence that it pushed gold prices to a six-month low, dipping below the $1,850 threshold this month.
The XAU/USD index, which measures gold against the dollar, has fallen to levels last seen in March 2023. Moreover, the U.S. dollar’s DXY index surged to 107 this month, coming within 7 points of regaining its 52-week high of 114.
In conclusion, over a three-month period, the U.S. Dollar has prevailed over BRICS currencies, five other major currencies, gold, oil, and various commodities. The USD remains the prevailing global reserve currency, with no other local currency poised to challenge its status.
The USD rise happens as the 10-year U.S. Treasury Yield has reached its highest in 16 years. However, the USD surge could mean the slowing down of the economy going ahead.
Will Bitcoin Come to the Rescue?
A rising USD could be troublesome to other emerging economies, that have to shed more local currency in order to purchase the USD. The world’s largest cryptocurrency Bitcoin (BTC) has been designed to serve as a hedge to the USD and the global central banking system.
Some countries like El Salvador have already started accumulating Bitcoin (BTC) as part of their reserves. It remains to be seen whether the rising USD could lead to rising Bitcoin adoption among the BRICS nations.
Over the last weekend, the Bitcoin price has witnessed a strong surge moving closer to $28,000. As of press time, Bitcoin is trading 3.29% up at a price of $27,902 and a market cap of $544 billion. The recent price surge in Bitcoin comes amid strong whale accumulation. During the past 48 hours, Bitcoin whales accumulated 117 BTC worth $3.2 million.
#Bitcoin whales bought around 117 $BTC in the past 48 hours, worth roughly $3.2 million. pic.twitter.com/Aoshmy0r4D
— Ali (@ali_charts) October 15, 2023
On-chain data provider Santiment reported: that Bitcoin’s resurgence to $27,000 is due to the movement of significant quantities of older, dormant coins. This recent shift marks the most substantial transfer of inactive BTC between wallets since July. These sudden peaks in our Age Consumed metric often signal shifts in price direction.
