Fabio Panetta, a member of the Governing Council of the European Central Bank, said that the international monetary system might shift from a dollar-dominated one to a system featuring several coexisting global currencies.
Panetta said in Dublin on Tuesday that although the dollar will remain a key currency, the world “may gradually move towards a more multipolar pattern.” “This shift could bring greater diversity, but if coordination fails, it could also heighten volatility and contagion risks.”
Paolo Gentiloni, who also serves as the governor of the Bank of Italy, said that good governance is the key to managing such risks. He pointed out that the pillars of monetary stability remain national authority and an independent central bank.
The triennial survey released by the Bank for International Settlements in September shows that the US dollar continues to dominate the global foreign exchange market, accounting for as much as 89.2% of all transactions, up from 88.4% in 2022. The share of the euro declined from 30.6% to 28.9%, while that of the Japanese yen remained largely stable at 16.8%.
Europe has been striving to enhance its strategic autonomy, which includes endowing the euro with greater global influence. The EU has improved cross-border payments, strengthened liquidity support, and is committed to upgrading the digitalization level of its financial infrastructure.
Panetta said that Europe needs more liquid capital markets and a more investment-oriented economy in order to play a greater role in the international monetary system.
Looking ahead, he said, the future of the dollar “will depend on some slow-changing factors, such as the weakening of some of the traditional pillars of the dollar, the rise of China and the progress made by Europe in deeper integration.”
Technical analysis:
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Gold: The blue zone we alerted yesterday in our plugin, after breaking through 4212, a buy limit was placed, and the performance was relatively in line with expectations. Today, we will face the test of the Federal Reserve meeting. Technically, if it recovers to 4225/30, we should continue to capture the signal of a pullback after a momentum break. Additionally, to prevent hawkish rate cut remarks, the signal of low liquidity buying at 4170/80 should be supplemented once again. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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Nasdaq: Yesterday, the buy limit in the green zone of our plugin performed extremely well, rising above 27,000 at its peak and achieving a 110bp gain. For today, we suggest waiting for the recovery of the resistance at 25,650/80 before going long. However, considering the FED meeting tonight, it’s also necessary to keep an option for a rebound from the low-sweep liquidity near 25,500. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: Yesterday, the buy stop in the blue area performed averagely and did not achieve a one-to-one profit-to-loss ratio. For today, it is recommended to observe for a day and wait for the outcome of the Federal Reserve meeting before deciding on the operation direction. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Today’s key economic data and events to focus on:
03:00 US Federal Funds Rate Benchmark
At 03:30, the Chair of the US Federal Reserve, Powell, will hold a press conference on monetary policy.
