US Dollar Exchange Rate Declines Significantly: Impact on Global Economy and US Trade Balance

News from the western money and currency markets indicate that the value of the US dollar exchange rate has declined significantly from its highest level against other major currencies in the recent period. The dollar’s historical declines indicate that such a decline has not occurred in nearly a quarter of a century.
Western experts specializing in currency exchange rates believe that this decline is caused by the slowdown in inflation rates in the US economy. These rates, which were increasing at an accelerated pace, have slowed down more than expected, which led to a rapid decline in the dollar exchange rate against the main currencies, the European euro. The pound sterling, the Japanese yen, and to some extent the Chinese yuan and the Russian ruble.
This decrease is a positive indicator for the US economy, but it is a negative indicator for the economies of other countries in many regions of the world, especially the countries of the European Union, Japan and China.
As for the UAE, the issue is important because its national currency, the dirham, is pegged to the dollar, and the UAE prices and sells its oil and gas products against the dollar, which makes the movement of the dollar exchange rate up or down a vital issue. In any case, the issue of the exchange rate of the dollar in the United States by devaluing it against major currencies is a political matter more than being purely economic and financial, and the American administrations successively between “Republicans” and “Democrats” are working to reduce the exchange rate of the dollar to limit the ability of their countries’ commercial competitors, such as China and other countries. The European Union, Japan and a number of East and Southeast Asian countries, with the aim of increasing US exports abroad to reduce the trade balance deficit.
A number of officials in the current “democratic” US administration believe that the deficit in the trade balance cannot be reduced unless the value of the dollar is reduced, in addition to a reduction in the quantities of oil imported from the Arab Gulf states, Africa and South American countries. Although the US administration did not take a decisive position on the trade balance deficit; However, she does not show enthusiasm in this regard, as she believes that reducing energy consumption is necessary, but this must be done according to a long-term schedule in order to avoid the occurrence of restlessness and tensions on the part of members of society who are sensitive to these issues that affect their living lives, their daily movement, heating and lighting their homes, and their work. .
At the same time, the issue of addressing the trade deficit is strongly raised in the political and economic arenas, especially as the country is about to hold presidential and parliamentary elections in the coming year 2024.
Contrary to what was followed by the previous “Republican” administration during the era of President Donald Trump, the current “Democratic” administration excludes what a number of eminent and influential economists propose to impose high customs barriers to limit the import of goods and commodities coming from abroad to the US markets from China and the European Union countries. Japan and a number of developing countries in Asia, Africa and South America.
It seems that the administration is concerned about the negative political effects of this step on the US relations with its partners and allies from the industrialized countries, and those that export raw materials. Negatively on the global trade movement and harms the arguments of globalization and freedom of trade advocated by the United States, and raises economic, political and social crises within the countries allied to the United States, a number of which are currently suffering from crises, problems and economic turbulence such as Britain, Japan and a number of European Union countries.

2023-08-05 11:45:10
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