US dollar, DXY & FX market insights
High-frequency views on DXY, dollar funding, cross-currency basis and how USD trends shape global assets.
8 month later after my initial post USD index is down ≈8%
Bad news for #USD 👎
The value of a currency is a direct reflection of the organic demand for it. Sanctions will decrease the demand for US Dollar, via disincentives
Plus, it's the US consumer that will be paying for the tariffs, not the BRICS countries 🤷♀️
5 days ago I wrote that USD/RUB rate will fall. 5 days later it's down ≈2%
despite oil being down - gold is up
Ruble has hedge from multiple sides
if you've read my previous posts you know that gold is ≈36% of Russia's international reserves
this is taken straight from the Bank of Russia's balance sheet statement
100% of it is stored in Russia, thus no counterparty risk
critical component of Ruble's strength
the 70% USD dominance here is as calculated by the Fed across the chosen 5 chosen buckets - with the end result being a weighted composite measure
so don't read this as a literal 70% of all cross-border transactions
🇺🇸 USD dominance is alluring, accounting for ≈70% of currency usage worldwide
even countries that do relatively little trade with US have most of their transactions done in US dollars
ex: 🇮🇳 India invoices 86% of its exports in USD, while only 15% of its exports being to US
🇺🇸 USD dominance is alluring, accounting for ≈70% of currency usage worldwide
even countries that do relatively little trade with US have most of their transactions done in US dollars
ex: 🇮🇳 India invoices 86% of its exports in USD, while only 15% of its exports being to US
🇺🇸🇷🇺 USD/RUB rate already fell to July 24th close, below 80
although it's also important to note that there are several factors at play - USD index is also down today
despite oil down - gold is up. this is about the monetary policy of Russia and their balance sheet structure
🇷🇺 oil up is GOOD news for Russia & Ruble
every surplus above $60/barrel of Urals oil increases FX reserves in NWF (Yuan or gold) - an interplay between MoF and CBR
exporters pay taxes in Ruble - so higher buying pressure
mark my words:
👉 you'll see USD/RUB exchange rate fall
