It has been just revealed that JPMorgan notes the fact that there is a de-dollarization alert underway. Check out the latest reports about this below.
According to experts from JPMorgan, the growing tensions between the United States and China could lead to de-dollarization becoming a more significant issue.
Escalation of the situation
These strategists caution that if the situation escalates, the dollar’s market share in global reserves and trade settlements could be impacted.
Additionally, they suggest that this competition between the two powerful nations could result in the emergence of a new Cold War.
“If tensions between the United States and China intensify and we get more global fragmentation which would likely lead to deglobalization in trade and finance… In finance, it could also lead to de-dollarization.”
There is a risk that the dollar’s dominance may be challenged due to political issues, according to JPMorgan analysts.
The government’s ability to keep the economy stable during a financial crisis could be hindered by political conflicts, which was seen earlier this year when officials were at odds over a bipartisan debt ceiling deal.
In response, President Xi Jinping introduced market-friendly changes to boost China’s economy.
The analysts suggest that China’s economic reforms and potential easing of strict capital controls could also weaken the dollar’s supremacy.
However, JPMorgan market strategists believe that it is unlikely for another currency to replace the US dollar as the world’s reserve currency within the next decade.
JPMorgan in the news
Several banks, including Bank of America, Citigroup Inc., and JPMorgan Chase & Co., were accused of conspiring to unlawfully increase interest rates on certain municipal bonds.
The goal was to dissuade investors from exchanging them for cash. However, instead of appearing in court on August 7, a settlement was reached after an emergency order was granted by Judge Thomas Donnelly.
During a hearing on Monday, lawyers representing Edelweiss Fund argued for double the settlement amount in a whistleblower lawsuit against the banks, according to Bloomberg.
