Among the many legacies of the Trump era is the distrust and resentment it has sown in the primacy of the US dollar in international trade and the way the US under Trump has been prepared to exploit its reserve currency status.
The role of the dollar in international trade and financial transactions – 50 per cent of global trade is invoiced in US dollars, about two-thirds of global foreign exchange reserves are denominated in them along with a similar proportion of global securities issuance – gives it extra-territorial reach, effectively forcing third parties to co-operate and facilitate their enforcement.
SWIFT is a co-operative controlled by about 3500 international banks and is arguably the key piece of global financial system architecture.In response to the abrupt US change in stance towards Iran and its impact on Europe and European companies – they would be in breach of the sanctions and risk being sanctioned themselves and cut out of SWIFT and the global financial system if they continued to trade with Iran – the Europeans tried to develop a workaround.
The Iranian experience and US threats of sanctions – including threats against businesses working on or financing the Russian-sponsored Nord Stream 2 gas pipeline between Russia and Germany that included the prospect of “crushing” sanctions of a German port that was the logistical hub for the project – caused the Europeans to think more deeply about their vulnerability to the power of the dollar.
Promotion of a greater use of the euro to settle transactions between European companies in traditionally US-dollar denominated trades, like commodities, and a shift from using US dollars in financial benchmarks to euros are among the paths being explored.
How did Morrison ever support this evil man
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.