USD hegemony comes to an end

USD hegemony comes to an end

2022-03-18 • Updated

On March 16 the Federal Reserve hosted the press conference where it announced several disappointing facts about the US economy. The FOMC raised the forecast for the US inflation for 2022 to 4.3% from 2.6% despite the key rate upgrade. Moreover, the Fed sharply downgraded the forecast for US GDP for 2022 to 2.8% from 4%.

The US politicians and the White House have been blaming the Russia-Ukraine conflict and supply chain issues for inflation growth. However, it looks more like American authorities offer excuses for a failed monetary policy, extreme price growth, and huge government debt.

What is happening?

The US dollar has been the reserve currency since 1944. Moreover, even today most of the payments for oil transactions are in dollars, which supports the US currency. However, nowadays, leaders of China, Russia, Saudi Arabia, and India work new settlement system, which will exclude the US dollar. 

For instance, Saudi Arabia considers using the yuan instead of the US dollar to pay for part of the oil that the kingdom supplies to China. China buys more than 25% of the oil exported by Saudi Arabia, and the kingdom is China's largest oil supplier. The authorities of Saudi Arabia and representatives of big business are increasingly dissatisfied with the foreign policy of the US administration.

India and Russia also consider excluding the US dollar from payments and moving to trade settlements in rubles and rupees. The nations want to use the Chinese yuan as the base currency. The new mechanism will allow Indian exporters to get payment for their goods in local currency instead of dollars or euros.

These innovations in the Asian region can significantly reduce the demand for the US dollar and weaken it.

Forecast for USD

The Fed got trapped between extremely high inflation and the rising government debt of the United States. It might play a bad joke on the USD in the nearest future. The world might lose trust in the White House and turn to other currencies such as the Chinese yuan.

USD, weekly chart

Resistance: 99.3

Support: 97


The US dollar index (DXY) has formed a bearish divergence on the weekly timeframe. The price might decline to 97 within a couple of weeks. Moreover, in the case of lower border breakout, we might see a further decline to 95.2.

GBPUSD, weekly chart

Resistance: 1.3190, 1.3370, 1.3520

Support: 1.2950, 1.2740


The Bank of England was the first to increase the key rate. On March 17 policymakers increased the rate for the third time up to 0.75. In long term, such steps might make a significant effect on GBP and push it higher against other currencies.

The chart has formed a bullish flag. Traders might consider purchasing GBPUSD at 1.2950 support or after a breakout of the upper border of the flag.


Crypto Market Bottom Forecast
Crypto Market Bottom Forecast

The lower Bitcoin goes, the more we hear about its end. Rumors about the death of the crypto market have been here for ten years and won’t end in the future.

Bulls Are Coming Back
Bulls Are Coming Back

The US dollar index rose to 105.40 after the Fed’s 75-basis-point key rate hike, while the stock and the crypto markets fell. However, during the past few days, investors and traders returned to risk assets as they expect inflation growth to slow. Moreover, Jerome Powell, the head of the Federal Reserve, announced the Fed might start cutting the key rate by 2024, which is the most evident hint of an upcoming market reversal.

What to Trade on June 20-24?
What to Trade on June 20-24?

Last week was shocking!  The US dollar gained more than 2% against other currencies ahead of the 75-basis points rate hike by the Federal Reserve on Wednesday but dropped after the announcement…

Latest news

What to Trade on July 4-8
What to Trade on July 4-8

Last week was bearish for risky assets such as stocks, oil, gas, and crypto. Will the upcoming week change the situation across the markets? Let’s look at it in detail!

When Will the US Stocks Bear Market Bottom?
When Will the US Stocks Bear Market Bottom?

US stocks have delivered their worst first half of a year in more than 50 years triggered by the Fed's attempt to control inflation and growing concerns about recession.

The Dollar's Strength or Other Currencies' Weakness?
The Dollar's Strength or Other Currencies' Weakness?

The value of the US dollar continues to rise, but is this because of the strength of the dollar itself or just the weakness of the euro, Japanese yen, and British pound? Since the beginning of the year, the US dollar index has been up 8…

Deposit with your local payment systems

Be on top of your game

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.


A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera