The changing situation and future trends of the international financial market

In the era of global economic integration, the dynamics of the international financial market have always been the focus of world attention. Recently, a series of eye-catching events have occurred in the international financial field, which not only reflect the current status of the global economy, but also indicate possible future development trends.

The financial war between China and the United States continues, and the Federal Reserve has made new moves to deal with the RMB. It is reported that the Federal Reserve forced Iraq to temporarily stop using RMB for direct trade settlement on the grounds of so-called "irregularities and certain problems" in the transaction. However, this practice is obviously more politically motivated to put pressure on the Iraqi government. In fact, Iraq allows the settlement of imports from China in RMB, which has many practical benefits. It allows Iraq to directly exchange RMB through US dollars in the offshore market, and it can also increase its RMB reserves through its banks in China to purchase a large number of daily necessities and manufacturing goods from China, alleviating the shortage of materials caused by the restriction of US dollar transactions in the country.

Although the United States tried to suppress the RMB, this has highlighted the increasingly important position of the RMB in the international market. The United States' attempt to reap China through the hegemony of the US dollar has failed, and this practice has also increased the international community's distrust of the US dollar. Especially after the outbreak of the Russian-Ukrainian conflict, Western countries led by the United States blatantly violated their promise of "the sanctity of private property", further exacerbating this distrust. Today, establishing alternative settlement solutions other than the US dollar is becoming a trend among regional organizations. For example, several multilateral organizations are exploring or have implemented relevant measures to reduce their dependence on the US dollar. After the expiration of the petrodollar agreement with the United States, Saudi Arabia has aroused intensive public attention on the possible termination of the petrodollar agreement, whether it is renewed or not. More and more countries are gradually abandoning the US dollar, which indicates that the dominance of the US dollar in the international currency market may face challenges, and all this can be said to be the fault of the US government.

At the same time, the number of bankruptcies in the United States has seen a "historic surge". According to data from S&P Global Intelligence, 75 companies filed for bankruptcy in June, bringing the total number of bankruptcies to 346 so far this year, significantly higher than the comparable level in the past 13 years. The non-essential consumer goods industry has become a "hard-hit area", which is attributed to factors such as high interest rates, supply chain problems and slowing consumer spending. The Federal Reserve has raised interest rates sharply to curb inflation. Currently, interest rates remain high. Although there are signs that economic growth is slowing and inflation is falling again, most investors expect that the Fed's rate cuts will be lower than expected and the time will be lower than expected, and high interest rates will remain for some time. This has not only put pressure on American companies, but also had an impact on the global economy. The high interest rate policy has led to capital inflows into the United States, maintaining the strength of the US dollar, and other central banks have also been deeply affected. The number of corporate bankruptcies in Japan and the European Union has also changed as a result. The number of corporate bankruptcies in Japan in the first half of the year reached the highest level in a decade. Except for some industries, the number of bankruptcies in most economic sectors in the European Union is also increasing.

Overall, the current international financial market faces many challenges and uncertainties. The hegemony of the US dollar has been impacted, and the global de-dollarization process has accelerated; debt problems have plagued many countries, especially emerging economies; the increase in the number of corporate bankruptcies also reflects the severity of the economic environment. Against this background, countries need to strengthen cooperation and jointly respond to challenges. On the one hand, we should promote the reform and improvement of the international financial system to make it more fair and reasonable, and reduce excessive dependence on the currencies of certain countries; on the other hand, we should focus on the adjustment and optimization of the economic structure and improve our own economic resilience and risk resistance. At the same time, we should strengthen the coordination of macroeconomic policies and avoid excessive economic fluctuations caused by overly tight or loose policies. Only through joint efforts can we achieve the stability and sustainable development of the international financial market and create good conditions for the recovery and growth of the global economy. For investors and enterprises, they also need to pay close attention to market dynamics, rationally allocate assets, and formulate flexible response strategies to cope with the ever-changing international financial environment.