Core Viewpoint - The share of the US dollar in global central bank foreign exchange reserves is gradually declining, reaching its lowest level in 30 years at 56.32% by the end of Q2 2023, a decrease of 1.47 percentage points from the end of Q1 2023 [1][3]. Group 1: Dollar's Decline in Reserves - The International Monetary Fund (IMF) reported that the decline in the dollar's share is primarily due to exchange rate fluctuations, with the dollar index dropping over 10% in the first half of the year, marking the largest decline since 1973 [3][6]. - Despite the decline in the dollar's share, if exchange rate changes are excluded, the dollar's share in global reserves remained stable in Q2 2023 [3][6]. - The dollar's performance against other currencies, such as a 7.9% depreciation against the euro and over 11% against the Swiss franc in the first half of the year, contributed significantly to the reduction in its reserve share [3][6]. Group 2: Other Currencies' Performance - The euro's share in global central bank reserves increased to over 21%, the highest since 2021, despite a decrease in its total holdings, attributed to its significant appreciation in Q2 2023 [3][6]. - The IMF noted that the dollar's share in global reserves fell by approximately 92% due to exchange rate factors from April to June 2023 [3][6]. Group 3: Future Outlook on the Dollar - Analysts from UBS predict that the dollar may weaken further in the coming months due to the Federal Reserve's potential rate cuts, large unhedged dollar-denominated overseas investments, and high US twin deficits [6]. - Noted economist Hong Hao anticipates a significant depreciation of the dollar over the next 5 to 7 years due to worsening US fiscal and trade deficits and credit deterioration [6].

Group 1 - The article discusses the potential for Iran to block the Strait of Hormuz, highlighting that while the feasibility is high, economic constraints and pressure from Gulf countries may limit this possibility [3][13][77] - Following the ceasefire announcement between Israel and Iran on June 24, market concerns regarding the blockade have significantly decreased, with the implied probability of Iran blocking the Strait dropping from 53% to 17% [3][20][77] - Historical data shows that Iran's threats to block the Strait have typically resulted in short-term price increases for oil, with significant supply disruptions potentially pushing prices above $130 per barrel if a blockade were to occur [4][28][47] Group 2 - The article outlines that approximately 20% of global oil consumption is transported through the Strait of Hormuz, and a blockade could create a supply gap of 8.56 million barrels per day, even with alternative pipeline routes [4][37][47] - The impact of oil price fluctuations on inflation is discussed, indicating that a $10 per barrel change in oil prices could affect the annual CPI inflation by about 0.2 percentage points in the U.S. [5][51][78] - The relationship between rising oil prices and the U.S. dollar is explored, suggesting that a significant increase in oil prices could strengthen the dollar, as it has historically shown a correlation with oil price movements [5][61][78] Group 3 - The article notes that the influence of rising oil prices on gold prices is ambiguous, as increases in oil prices can lead to higher inflation expectations while also pushing nominal interest rates up, creating conflicting effects on gold [6][68][78] - Historical analysis indicates that during previous oil supply shocks, gold prices have reacted variably, often driven by geopolitical tensions rather than oil price movements alone [6][68][78]

Group 1 - The potential non-farm employment growth in the U.S. is expected to decline significantly from over 100,000 jobs per month to less than 10,000 by the end of next year, leading to a reduction in the potential economic growth rate from slightly above 2% to 1.4-1.6% [1] - The average monthly job creation in the private sector over the past two years has been approximately 172,000, indicating a stark contrast with the anticipated future potential growth [1] - The Bank of Japan's bond purchase plan lacks long-term guidance, creating ongoing market uncertainty regarding the scale of bond purchases post-April 2027 [1] Group 2 - The Federal Reserve's economic projections reveal the highest level of divergence in interest rate paths for 2025 in the past decade, with a median expectation of two rate cuts (50 basis points) but a range from no cuts to a 75 basis point reduction [2] - The disparity between the most common and second most common predictions for interest rate changes has reached 50 basis points, the largest difference in ten years, indicating fundamental disagreements among policymakers on balancing inflation control and economic growth [2] - Despite downgrades in the U.S. credit rating by major agencies, foreign investment in U.S. Treasury bonds remains strong due to the lack of reliable alternatives and the relatively high yields offered [2] Group 3 - Key factors influencing the global market include the potential for tariff agreements among countries, fluctuations in the dollar's exchange rate, and rising risks associated with the U.S. deficit [3] - There is an expectation that major countries may reach partial consensus on tariff issues and extend grace periods while implementing specific industry tariff measures [3] - The U.S. deficit risk is anticipated to rise, which may keep U.S. Treasury yields between 4% and 5% [3]