US dollar dominance diminishing

The US dollar grip as the dominant global currency is loosening, said top economist of credit rating agency S&P Global on Tuesday.

Aggressive US sanctions such as last year's freezing of hundreds of billions of US dollar's worth of Russia's reserves has seen a flurry of countries start to do some trade in currencies other than dollar as well as repatriate gold reserves.

The dollar "doesn't have quite the pull it used to," Paul Gruenwald, S&P's chief economist, said at a conference hosted by the ratings firm in London.

"There's a fragmentation around the edges".

Gruenwald pointed to a number of examples where countries were now circumventing the dollar, "We've got other things happening outside of the dollar world".

He cited the rise in trade done in China's yuan and the cheap financing offered by China-headquartered development banks such as the Asia Infrastructure Investment Bank and the New Development Bank, formerly known as the BRICs bank.

"The US dollar will continue to be a leading world currency, but it will no longer be the dominant world currency," Gruenwald said.

US dollar sank to a two-month low against its major peers on Wednesday in the lead-up to a key US inflation reading, while sterling scaled a 15-month top on expectations the Bank of England (BoE) has further to go in raising rates.

US inflation data is due later on Wednesday, with expectations core consumer prices rose 5% on an annual basis in June. The figures should also provide further clarity on the Federal Reserve's progress in its fight against inflation.

Ahead of the release, the US dollar fell to a two-month low against a basket of currencies, extending its losses from the start of the week after Fed officials said the central bank was nearing the end of its current monetary policy tightening cycle.

 

Putin criticizes West over Ukraine war

Russian President Vladimir Putin is showing no regrets for the war against neighbour Ukraine, insisting it is going according to plan and playing down any nuclear standoff with the West.

Putin, in remarks at a conference in Moscow on Thursday, had a familiar litany of grievances against our Western opponents and said the West's dominance over world affairs was coming to an end.

Putin accused the West of inciting the war in Ukraine and of playing a dangerous, bloody and dirty game that was sowing chaos across the world. Putin said, the West would have to talk to Russia and other major powers about the future of the world.

"We are standing at a historical frontier, ahead is probably the most dangerous, unpredictable and, at the same time, important decade since the end of World War Two," Putin said at an annual foreign policy conference.

The conflict, which began eight months ago with an invasion by Russian forces of neighbouring Ukraine, has killed thousands, displaced millions, shaken the global economy and reopened Cold War-era divisions.

Asked at the conference whether there had been any disappointments in the past year, Putin answered simply: "No", though he also said he always thinks about the Russian lives lost in Ukraine.

In response to questions, Putin made no mention of Russia's battlefield setbacks in recent months and said Russian aims had not changed.

Russia was fighting to protect the people of the Donbas, he said, referring to an eastern industrial region that comprises two of the four Ukrainian provinces he proclaimed annexed last month.

Fighting on the ground appears to have slowed in recent days, with Ukrainian officials saying tough terrain and bad weather had held up their main advance in Kherson.

On Thursday a close ally of Putin, Chechen leader Ramzan Kadyrov, said 23 of his soldiers had been killed and 58 others wounded in a Ukrainian artillery attack this week in Kherson. After the attack, Chechen forces killed about 70 Ukrainians, he said.

Russian forces shelled Ukrainian positions along the entire line of contact and built fortifications, particularly on the east bank of the Dnipro River, the General Staff of the Ukrainian Armed Forces said in a Facebook post on Thursday evening.