The US dollar has always been a topic of serious discussion among analysts. While several experts are busy predicting its fall, some analysts are vying for the USD's new pace, labeling the currency as the best available option among its peers.
Experts from Morgan Stanley, a leading financial institution, have joined the pro-USD league and shared a new analysis, stating that the US dollar will be difficult to control and dominate.
Also read: Currency: What to expect from the US dollar today
Comparison of the US dollar with the Chinese yuan
China has been trying to do that for a long time subjects the dominance of the US dollar on a global scale. The country has already accelerated efforts to combat the supremacy of the US dollar by forging trade alliances in local currencies. China and Russia recently traded $260 billion worth of yuan and rubles, leaving the USD out of trading proceedings.
With the rise of multipolar currencies and the formation of BRICS, several countries have now seized this opportunity and challenged the prestige of the USD. The BRICS countries are also working to develop an independent currency. This blockchain-based currency is said to directly challenge the hold of the US dollar around the world while derailing its momentum.
At the same time, the US economy and its eroding economic parameters are also fueling the degradation of the USD on a global scale. The rising US debt figures indicate a shaky position, which in turn affects the prestige of the United States as a robust economy.
However, in a recent report, Morgan Stanley analysts shared a rather astonishing analysis, claiming that the US will prosper despite the current opportunities gnawing at its door.
Also read: Russia and India handle trade worth $4 billion in rupees, ditching the US dollar
The Chinese Yuan will not hurt the US Dollar.
According to Morgan Stanley head of emerging market currency strategy James Lord, the Chinese yuan will never be able to uproot the US dollar. Lord explained his reasoning behind this bold claim, stating that the yuan is not liquid enough to challenge the USD's global power dynamics.
Lord reiterated crucial facts and reiterated how Beijing's strict control over its currency flows could thwart efforts to overtake the US dollar.
“It seems unlikely that the US dollar will be meaningfully challenged any time soon. To do this, we believe China must relax control of its currency and open its capital account. It doesn't seem likely that Beijing will want to do this anytime soon,” Lord said.
Currently, the Chinese economy is undergoing a serious real estate crisis. China's housing market has plummeted to a new low, pointing to signs of unrest swirling in the story.