{"id":590214,"date":"2023-07-16T00:00:00","date_gmt":"2023-07-16T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/07\/16\/slowing-us-inflation-is-bringing-the-greenback-back-down-to-earth\/"},"modified":"2023-07-16T00:00:00","modified_gmt":"2023-07-16T00:00:00","slug":"slowing-us-inflation-is-bringing-the-greenback-back-down-to-earth","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/07\/16\/slowing-us-inflation-is-bringing-the-greenback-back-down-to-earth\/","title":{"rendered":"Slowing US inflation is bringing the greenback back down to earth"},"content":{"rendered":"

<\/span>The greenback is tumbling as US inflation slows \u2014 and that\u2019s good news for risk <\/span>assets: <\/span>The accelerating decline of the USD on the back of easing US inflation is increasing investor appetite for higher-yielding risk assets around the globe, <\/span>Reuters<\/a><\/span> reports. The greenback has now dropped almost 13% against a basket of currencies from last year\u2019s two-decade high, and last week hit its lowest level in 15 months. The decline was accelerated by last week\u2019s <\/span>slower-than-expected inflation data<\/a><\/span>, which is fuelling bets that the US Federal Reserve will soon bring its aggressive tightening cycle to an end.<\/span><\/p>\n

EM assets stand to benefit: <\/span>The MSCI International Emerging Market Currency Index has gained 2.4% this year as the greenback\u2019s decline makes USD-denominated debt easier to service. The USD\u2019s fall could also <\/span>continue to boost the EM carry trade<\/a><\/span>, the process whereby investors borrow greenbacks at low interest rates to invest in higher-yielding EM currencies. The Colombia\u2019s <\/span>COP<\/span> has yielded 25% year-to-date, while Poland\u2019s <\/span>PLN<\/span> has gained 13%, according to data from Corpay.<\/span><\/p>\n

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India, UAE jump to de-dollarize trade, link payment systems: <\/span>The UAE and India have agreed to use their own local currencies for cross-border trade and link their payments systems under MoUs inked during Indian Prime Minister Narendra Modi\u2019s visit to the UAE yesterday, according to statements from the UAE<\/a><\/span> and India\u2019s central bank<\/a><\/span>.<\/span><\/p>\n

We\u2019re noticing a trend here:<\/span> Major emerging markets such as China, Russia, India, Brazil and <\/span>Saudi Arabia have <\/span>accelerated the use of local currency<\/a><\/span> settlements in response to Washington\u2019s unprecedented financial sanctions against Moscow, cutting out the USD for bilateral trade.<\/span><\/p>\n

ALSO WORTH NOTING-<\/span><\/p>\n