Last years sudden surge in demand for the U$D as the debt bubble burst allowed an artificial jump in the U$D index. That .... is over.
The U$D is now sounding its death nell as our trading partners are seeking ways to minimize their exposure to our exported inflation.
You may have heard about the recent China/Brazil trade agreement.
Chinese President Hu Jintao and Brazilian President Lula da Silva witnessed the signing of 13 agreements in Beijing.
The highlight was a $10 billion loan from China Development Bank to Brazil's state-owned Petrobras oil company. In return, Petrobras is to supply China's state-owned Sinopec with up to 200,000 barrels of oil a day for the next 10 years.
[..}China last month overtook the United States to become Brazil's number one trading partner, with two-way trade in April reaching $3.2 billion.
It was unclear whether or not this trade deal involved using their domestic currencies instead of the U$D but the subject is gaining more traction all the time.
But these are not the only economies shirking the U$D.
The US dollar is not Russia’s basic reserve currency anymore. The euro-based share of reserve assets of Russia’s Central Bank increased to the level of 47.5 percent as of January 1, 2009 and exceeded the investments in dollar assets, which made up 41.5 percent, The Vedomosti newspaper wrote.
The dollar has thus lost the status of the basic reserve currency for the Russian Central Bank, the annual report, which the bank provided to the State Duma, said.
In accordance with the report, about 47.5 percent of the currency assets of the Russian Central Bank were based on the euro, whereas the dollar-based assets made up 41.5 percent as of the beginning of the current year. The situation was totally different at the beginning of the previous year: 47 percent of investments were made in US dollars, while the euro investments were evaluated at 42 percent.
Is it any wonder why we are seeing the U$D return to its all time low support at 80? This is only the beginning.