#4 of 6: A Study of USD Foreign Reserve Currency Holdings and What It Means?
Summary:
As I pointed out in #1 of 6: Dollar Hinges on Election Post Stimulus Self Destruction, the US dollar will trade entirely based on policy and that will be determined by the election. An examination of Foreign Exchange Holdings (“FXH”) of US dollars as reserve currency data from the IMF from the perspective of US political parties and presidential administrations yields interesting insights.
- Republicans have hurt the US dollar as a reserve currency while Democrats have been constructive.
- China’s goal to tighten relations with developing nations could thus negatively impact the USD as reserve currency.
- A decline in the USD as reserve currency would have its biggest impact felt on US interest rates and rolling the national debt.
www.macroesg.com #macroesg