Dollar performance since 2022
This is to demistify some ideas regarding the dollar:
1 - The yuan will replace the dollar as the universal legal tender.
It's true that the US government "printed" a lot of money during the Covid pandemic and since the beginning of the Russian invasion of Ukraine. Thus the dollar was weakened by inflation and the US national debt. But while that is true it has appreciated over the yuan and the ruble.
2 - The recent drop in USD/BRL is a long term trend.
The currency of non-aligned (regarding the war in Ukraine) countries slighted benefited from the recent comparative weakness of the dollar. What is special about Brazil is the high interest rate which puts the country ahed of the World in controlling inflation and makes the country super attractive to bond investors. But the Brazilian economy is plagued by internal issues and not growing as much as the rest of the World. So eventually the Central Bank of Brazil will reduce the interest rate because the inflation is getting under control and the dollar will recoup value due to the investments outflow.
1 - The yuan will replace the dollar as the universal legal tender.
It's true that the US government "printed" a lot of money during the Covid pandemic and since the beginning of the Russian invasion of Ukraine. Thus the dollar was weakened by inflation and the US national debt. But while that is true it has appreciated over the yuan and the ruble.
2 - The recent drop in USD/BRL is a long term trend.
The currency of non-aligned (regarding the war in Ukraine) countries slighted benefited from the recent comparative weakness of the dollar. What is special about Brazil is the high interest rate which puts the country ahed of the World in controlling inflation and makes the country super attractive to bond investors. But the Brazilian economy is plagued by internal issues and not growing as much as the rest of the World. So eventually the Central Bank of Brazil will reduce the interest rate because the inflation is getting under control and the dollar will recoup value due to the investments outflow.
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