About: Investoom Weekly is the newsletter by the market intelligence company Investoom that provides AI-powered investment insights through social sentiment data, onchain data and financial data. Investoom democratizes the access to hedge fund insights.

Overview of the topics

• Latest Highlights: Brazilian President, Luiz Inácio Lula da Silva, has urged developing nations to find an alternative to the dollar.
• Economic Data: The BRICS countries are reportedly exploring the possibility of creating a new reserve currency.
• Social Data: The US dollar experienced a steep decline in late 2022 and early 2023 but rebounded strongly in February.
• Onchain Data: Bitcoin has gone up by 46.18% in the last six months and has reported an increase of 65.54% year-to-date.
• Deep Dive: Twitter began partnering with eToro to give users access to a wider range of financial assets, including cryptos.

‍

Latest Highlights

Brazil’s President against the dollar

Brazilian President, Luiz Inácio Lula da Silva, has urged developing nations to find an alternative to the dollar as the sole currency for global trade.

Speaking during his last visit to China, Lula added his voice to the growing de-dollarization movement, led by the BRICS countries. In fact, he called for a common currency for BRICS nations to conduct trade, and challenged the decision that made the dollar the default currency after the gold standard ended.

The BRICS nations had already begun reviewing a new currency based on a basket of member currencies for moving away from dollar dependence. However, some analysts remain skeptical, noting that while the dollar may weaken, there is no likely alternative currency that could replace it.

The yuan, even if it is gaining more importance in trade finance, is unlikely to replace the dollar due to China's tight control over it. While Lula's stance on the issue may signify the warming ties between Brazil and China, the dollar currently plays a crucial role in Brazil's commodity markets and industries, making its rejection less probable.

‍

Economic Data

The solution of the BRICS countries

The BRICS countries - Brazil, Russia, India, China, and South Africa - are reportedly exploring the possibility of creating a new reserve currency that will better serve their collective economic interests.

Pavel Knyazev, the Russian ambassador to the BRICS, has suggested that the currency will be based on a basket of the currencies of the five-nation bloc: the Brazilian Real, Russian Ruble, Indian Rupee, Chinese RMB Yuan, and South Africa's Rand. He added that the States are actively studying a mechanism to exchange financial information and develop a reliable alternative for international payments.

The BRICS countries, trying to reduce their reliance on the US Dollar and Euro, are set to build a joint financial infrastructure. The group's intra-trade has seen remarkable growth, reaching US$162 billion by the end of 2022. They have also been increasing the use of local currencies in mutual trade, with Brazil and China signing a new agreement earlier this month.

Furthermore, over the past two decades, there has been a steady growth in exports between the BRICS countries. China has consistently been the lead exporter among the BRICS countries since 2000, as its share of exports from the bloc has significantly increased. On the contrary, Russia has maintained the second-largest share of exports over the years, while South Africa has had the smallest share. India surpassed Brazil in terms of exports in 2009.

China is not only destined to be the largest State among the BRICS… By the next decade, the Chinese economy is predicted to surpass that of the US and become the largest in the world. India is also expected to overtake the U.S. by the middle of the century. The BRICS have become much more than just a trading bloc. As a result, the combined economies of the BRICS and G7 countries make up 11 out of the world's 12 largest economies.

‍

Social Data

Is the US dollar as weak as portrayed?

The US dollar experienced a steep decline in late 2022 and early 2023 but rebounded strongly in February due to positive economic data, including strong business hiring.

During its March meeting, the FOMC opted for a more cautious approach to maintain financial stability, retracting from the hawkish promises and plans outlined in December's economic projections. Despite the potential risks of increased inflation, the Fed believes that interest rates have reached or are nearing an appropriate level for restraining economic growth.

As the Federal Reserve's tightening campaign comes to an end and traders begin preparing for the first interest rate cut due to a softening economy, the U.S. dollar may face challenges in the 2nd quarter against other major currencies. Depending on the market sentiment, further losses for the U.S. dollar could be on the horizon.

One potential risk to this bearish outlook is if financial turbulence intensifies and creates a financial crisis. In this scenario, the U.S. dollar may become a safe-haven currency and regain its status as a leader in foreign exchange, but this is not the most likely scenario.

Furthermore, recent events showed that the U.S. authorities will intervene to prevent systemic risks from growing, so any risk-aversion and U.S. dollar strength is likely to be fleeting with this backstop in place.

‍

Onchain Data

Also BTC gained strength against the $

In recent months, Bitcoin has been experiencing a significant surge in its value. The cryptocurrency has gone up by 46.18% in the last six months, and has had a substantial increase of 65.54% year-to-date.

This indicates that Bitcoin is steadily gaining momentum in terms of its value and has become a promising investment option for many investors. It is noteworthy that a significant portion of the recent Bitcoin price surge can be traced back to trading activity in the United States.

This positive trend has prompted some individuals to advocate for further increases in Bitcoin's value and wider acceptance. However, specialists are hesitant to accept the projections made by enthusiasts and predict that the rise in BTC price will not reach further heights.

‍

Community

Interested in what the other readers think about it? Join our community on Discord and discuss our insights with other investors! [Join Discord]

‍

Deep Dive

But BTC price could continue increasing...

Twitter is partnering with eToro, a social trading company, to give its users access to a wider range of financial assets, including cryptos.

This new feature will allow users to view market charts and buy/sell assets through eToro. Currently, Twitter's "cashtags" feature already enables users to view real-time trading data from TradingView on certain index funds and company shares. Invite 3 friends to read the full article.

‍

News of the week

• Banks: Global financial system tested by higher inflation and interest rates. [Read more]
• Technology: Global financial system tested by higher inflation and interest rates. [Read more]
• Markets: Italian bonds shrug off higher rates to eclipse other big debt markets. [Read more]
• Investments: 13 VCs talk about the state of robotics investing in 2023. [Read more]

‍

Read the full version here.

‍

About

Investoom is a Munich-based Fintech Startup democratizing the access to quantitative investment insights that are used by big hedge funds, but are inaccessible to retail investors. We are a market intelligence company that provides AI-powered investment insights through social sentiment data, onchain data and financial data.

Disclaimer: The Investoom newsletter is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions. [Read more].

Advertising and sponsorship do not influence editorial decisions or content. Third party advertisements and links to other sites where products or services are advertised are not endorsements or recommendations by Investoom. Investoom is not responsible for the content of the ads, promises made, or the quality or reliability of the products or services offered in any third party advertisement.