The world today is undergoing major changes unseen in a century. Historic moments are becoming more and more common, and historic events are becoming more and more frequent. Regarding the future, as Alvin Toffler said: "The only thing that is certain is that tomorrow will surprise us all."
The euro is shoulder to shoulder with the dollar
Recently, we have witnessed another historic moment. On July 12, in the London trading market, the EURUSD reached the integer mark of 1:1, the lowest level since December 2002. This subverts people's traditional perception that the euro is "more expensive" than the dollar, and once again proves that in an era of change, anything is possible.
Faced with the hegemony of the US dollar, people once placed their hopes on the euro, believing that the euro was the currency most likely to challenge the hegemony of the US dollar. But what disappoints people is that since its inception, the euro has experienced continuous depreciation after a decade-long appreciation process. Over the past decade, the euro has depreciated nearly 40% from its peak against the U.S. dollar.
The Russia-Ukraine conflict has destroyed European countries' expectations for regional strategic stability and a prosperous future. Europe has been involved in the whirlpool of comprehensive sanctions against Russia. It is facing rapid rise in energy prices, tight supply of living materials, rising people's living costs, currency Expanded exacerbates other real-life problems. The prospect of the euro falling below this level reflects growing recession fears across the euro zone.
rupee and ruble hand in hand
After the conflict between Russia and Ukraine, the United States kicked Russia out of the Western settlement system in order to prevent Russia from doing business with the outside world and to try to contain Russia economically. Putin broke the situation with a "ruble settlement order", forcing "unfriendly countries" to use rubles to do business with Russia. Russia has no choice but to push forward the ruble settlement order. That is because Russia is a big country in oil, food, and natural gas. Settling in rubles breaks through the economic blockade imposed on Russia by the United States and the European Union, and skips the problems of banning the SWIFT system and freezing Russia's foreign exchange reserves in Europe and the United States. At the same time, it appreciates the ruble and stabilizes the market.
It is not only Russia that is promoting de-dollarization, but also India, which dreams of becoming a great power. Since the beginning of this year, due to the increase in international commodity prices, India's trade deficit has continued to expand; as the Federal Reserve raises interest rates, the Indian rupee continues to depreciate. Faced with the huge challenges posed to the world by the appreciation of the US dollar, the Indian government has resolutely decided to promote de-dollarization. The Reserve Bank of India has recently officially introduced the rupee settlement mechanism for international trade . This set of measures is simply a replica of Putin's "Ruble Settlement Order". In fact, in April this year, India had already embarked on the road to de-dollarization. At that time, the Reserve Bank of India was negotiating with Russia on the conclusion of a trade agreement, and they agreed to directly use rubles and rupees for trade settlement. This international trade rupee settlement mechanism is, to a certain extent, an expanded version of the ruble-rupee settlement mechanism.
The world is new every day. When the euro and the U.S. dollar stand side by side, when the rupee and the ruble go hand in hand, there is so much anxiety, so much sighing, and so much helplessness behind it, and what earth-shaking changes will happen to the world economic landscape in the future.
