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08.06.2023 01:49 PM
US dollar must retain global reserve currency status

In a meeting with House Democrats on Capitol Hill yesterday, the CEO of JPMorgan Chase Jamie Dimon expressed his views on the US economy and the US dollar.

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Dimon stated that the status of the US dollar as the world's premier reserve currency should not be challenged, even against the backdrop of ongoing global de-dollarization trend. "The United States is the fundamental foundation of the global economy. The US dollar is the fundamental reserve currency", Dimon said.

JPMorgan Chase CEO said that the US economy is in good shape. "Consumers are in great shape, home prices have gone up for 10 years, asset prices have gone up, debt's in good position," he commented. However, Jamie Dimon pointed out that the US economy had minor problems ahead, highlighting excessive spending, the Federal Reserve's monetary tightening, and uncertainty related to oil, gas, and energy.

Dimon also commented on the debt ceiling. "I think it's fabulous we didn't have a debt ceiling crisis. I think it's great," Dimon said, indicating his preference for doing away with the debt ceiling altogether. It is noteworthy that last week, Congress passed a bill suspending the debt ceiling limit until January 2025.

"People rely on the standards of consistency we have, the rule of law, and the protection of interests. We shouldn't be challenging that," Jamie Dimon reiterated. International trading using local currencies, including the Chinese yuan, clearly reduce BRICS countries' dependence on the US dollar, which is a significant concern for US policymakers.

Premarket movers

Shares of payment company Affirm rose by 2.4% after Affirm and Amazon announced that Affirm's Adaptive Checkout, which offers customers time-payment plans, will now be an accepted payment method for merchants using Amazon Pay. The company's shares have added another 1.7% during the premarket.

Shares of autonomous driving technology company Mobileye rose by 2.84% yesterday after Canaccord Genuity upgraded its rating to 'buy.' The Wall Street firm noted that Mobileye was a resilient company that would also improve global supply chains. However, the company stock has already dropped by 1.0% in premarket trading today.

Coinbase rose by 3.2% on Wednesday after losing 12% in the previous session. The US Securities and Exchange Commission sued Coinbase this week, accusing the company of acting as an unregistered exchange and broker. In premarket trading today, its shares have lost 1.8%.

On the technical side, demand for the S&P 500, has decreased. It is debatable if there was any demand for the index earlier. Bulls still have a chance to start an upward trend, but they need to hold on to $4,290. The index might jump to $4,320 from that area. Maintaining control over $4,370 is equally a priority for S&P 500 bulls, which will strengthen the bull market. In case of a downward movement amid dwindling risk appetite and hawkish comments from Fed policymakers, buyers must act near $4,255 and $4,230. A quick breakout below these levels will push the trading instrument down to $4,175 and open the way towards $4,143.

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