empty
 
 
23.01.2023 12:44 PM
Argentina and Brazil plan to abandon the dollar in settlements with each other

Today's announcement that Argentina and Brazil are once again in the early stages of beginning negotiations on the formation of a single currency for financial and commercial activities came as the demand for risky assets continued to increase. The idea of a unified currency will undoubtedly encounter many political and economic challenges.

The two major economies in South America have been debating ways to coordinate their currencies for many years, frequently as a response to the dominance of the dollar in the area. There has not been much advancement in practice as a result of the ongoing macroeconomic imbalances in both nations and the sporadic political barriers to this concept.

This image is no longer relevant

In a joint essay published in the Argentine newspaper Perfil on the eve of their meeting on Monday in Buenos Aires, Brazilian Luiz Inacio Lula da Silva and Argentine Alberto Fernandez noted that the development of regional trade can be aided by the exchange of their respective currencies.

"By removing obstacles and resolving disputes, we hope to modernize and simplify the regulations governing the promotion of regional currencies. We also choose to keep talking about the idea of establishing a common South American currency that can be used for financial and business transactions, cutting expenses," the declaration read.

Numerous analysts have remarked that many developing nations and markets are looking for alternatives to the US currency and that Argentina has recently struggled with the highest inflation in more than three decades. It is evident that Brazil's economy, like those of many other nations, will grow slowly this year, but the new Lula administration aims to considerably increase public spending, making it possible for it to keep its election pledges and causing another inflationary spike in the area.

The conversations were started by Argentina, according to the Brazilian government's delegate. However, they are still in their very early stages, and no completion date has been established. Brazilian Finance Minister Fernando Haddad revealed to reporters in Buenos Aires that Argentina is striving to revive its trade, which has been steadily declining recently owing to high inflation, and that one of the proposals being discussed is a single currency for financial and commercial operations. "Argentina is one of the nations with which we are in communication to develop exports, therefore we are examining several prospects that will allow us to increase trade."

Argentine Economy Minister Sergio Massa stated in an interview that Argentina and Brazil will extend invitations to other Latin American nations to join, but he did not want to "offer false hopes" due to the lengthy nature of the two nations' commercial integration.

Regarding the technical analysis of EUR/USD, there is still demand for the single currency, and there is a potential that monthly and annual highs will continue to be updated. Staying above 1.0870 will cause the trading instrument to increase to the 1.0930 region, which is what is needed to achieve this. Above this point, you can easily reach 1.0970 and update 1.1000 in the near future. Only the collapse of support at 1.0870 will put more pressure on the pair and drive EUR/USD to 1.0820, with the possibility of dropping to a minimum of 1.0760 if the trading instrument declines.

Regarding the technical picture of GBP/USD, the pound's growth is still going strong. Buyers must sustain their advantage by staying over 1.2390. However, only the breakdown of resistance at 1.2440 will make it more likely that the recovery will continue to the 1.2500 region, after which it will be feasible to discuss a more abrupt move of the pound up to the 1.2550 region. After the bears seize control of 1.2390, it is feasible to discuss the pressure on the trading instrument. The GBP/USD will be pushed back to 1.2340 and 1.2250 as a result, hitting the bulls' holdings.

Jakub Novak,
Analytical expert of InstaForex
© 2007-2024
通过InstaForex赚取加密货币汇率变动的收益。
下载MetaTrader 4并开启您的第一笔交易。
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

推荐文章

现在无法通话?
提出您的问题,用 在线帮助.
Widget callback