Foreign currency is, of course, very much in the public eye at present given the state of the economy on a global scale. Recent suggestions emanating from China for a global currency have been met with a lukewarm reception in foreign currency circles.
According to a report on Reuters, the American dollar isn’t going to succumb to calls for a global currency and will remain a problematic foreign currency which has the capacity to adversely effect many of the other currencies that are mainstays of the currency exchange market. The proposal to create a currency that could be used globally was a notion that stemmed from China but has since been dismissed as unworkable for the foreign currency exchange market; for the time being at least. Foreign currency exchange is clearly a tumultuous environment that is buffeted by various factors and this has a bearing on the value of a foreign currency but it is far too early for a global currency to be considered as a viable option. The foreign currency exchange market has, of course, been hard hit by the financial fallout of the credit crunch and the dollar has had one of the biggest impacts on the currencies it is intrinsically linked to.
Foreign Currency Market in the Midsts of Change
According to the report on Reuters, the foreign currency market, by its very nature, causes a degree of instability; hence the call from China to create a global currency but there are far too many features at play for such a notion to be considered viable at present. Chief amongst these reasons is the fact that the Americans would be unwilling to forsake their dollar, despite its apparent weakness, because of their desire for access to world’s reserve currency. The foreign currency exchange market is a highly structured one which is extremely difficult to predict which may be one of the reasons that China championed the idea of single currency used the world over but the currency exchange market is far to central to how the world operates to make such a radical change without significant foundations being put into place.
Dollar facing uncertain future in foreign currency markets
The dollar has often been considered the principle cornerstone of the foreign currency exchange market due to the influence held by the United States but, according to the report on Reuters, the strength of the dollar may experience a wane due to the stance that it is taking on many fronts pertaining to the global economy and the exchange of foreign currencies.
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