For 2 weeks the fall of US Dollar on the Forex market has been observed and it may continue in the future. One of the main reasons, not well-known among the public, is that two weeks ago the Independent reported the countries of Persian gulf together with China, Russia, Japan, and France to develop the plan of refusal of dollar prices for oil. Probably Brazil and India will also join that countries in the nearest future.
According to the Independent’s report, some secret meetings between Ministers of Finance and heads of the central banks of these countries have been held recently. There was taken a decision, that USD prices for oil will be replaced by the basket of currencies probably including Euro, Japanese yen, Chinese yuan, Russian rouble and a new united currency of the Persian gulf countries (Saudi Arabia, the United Arab Emirates, Kuwait and Qatar) the creation of which is only planned and discussed.
One of the interesting things is that China is interested in rising and crushing US dollar at the same time. The points is, that Chinese economy is suppressed by the big amount of dollars and foreign investments in USD, so Chinese government would like bucks to become weaker and were driven out of the country. But at the same time the Chinese understand that nowadays the 2/3 of Chinese national reserve is kept in dollars and a strong fall of USD on Forex market will bring China down in a moment. So, the Chinese government tries to be very careful in this situation.
The information on planned refusal of dollar pricing for oil was confirmed in bank circles of Persian gulf countries and also in China. Russia is also ready to join that counties in order to make its currency stronger and to end the domination of US Dollars in the world trading. Also the interest in such transition was stated by Brazil and India.
It is planned, that replacing dollar by the new basket of currencies will be finished by 2018. The definitive structure the basket isn’t defined and may change. But we already know the main candidates to be included there. The main point is, that USD is losing its position not only just of the economic factors. It’s also the question of history. For example, after the World War II the USA became the world leader almost in all spheres of economy. Due to that US Dollar was the main trading currency and was spread all over the world. At the moment the United States can boast of extremely good economical and political situation. USA was brought down by not only economical, but even political crisis, including internal and external politics. So, the American currency is falling down on Forex market.
The publication in “The Independent” has made the Forex market going crazy. In particular, the dollar at the auctions in Japan falls in relation to yen which can be a part of a currency basket for definition of cost of oil.