“the dollar’s share of global foreign-exchange reserves fell below 59 percent in the final quarter of last year,”
Good points, but foreign reserves are not the best indicator. They are political rather than economic decisions.
Actual trade is still what matters, and US dollar transactions are still 85% of all currency exchanges.
Correct. In the moment. One of the problems in trying to get a grip on changing situations is that it is as in navigation, "maneuvering relative to another vessel."
"Meanwhile, the U.S. share of the world economic output has fallen from 32% in 1980 to 24% in 2020<, according to calculations by the U.S. Federal Reserve, while the country's share of global trade dropped from 14% to 11% in the same period. Yet in other respects the dollar's grip is as tight as ever. The dollar was on one side of 88% of all foreign exchange trades in April last year, according to the Bank for International Settlements. The Fed estimates that between 1999 and 2019 the dollar accounted for 96% of trade invoicing in the Americas, 74% in the Asia-Pacific region, and 79% in the rest of the world. Banks used the greenback for around 60% of all international deposits and loans."So the dollar is strong because other nations are using it in trade, and the BIC and other big banks make profit thereby. Yet we fall in economic output as in share of global trade. These issue seem separate, but they are not long term. We as citizens are not synonymous with the U.S. Federal Reserve or Bank for International Settlements. At least my wife and I are not. You may own shares....In "Why the dollar keeps winning in the global economy," Reuters, 28 February 2023.
Source: https://www.reuters.com/breakingviews/global-markets-breakingviews-2023-02-28/
As share of global productivity and trade fall, the US in these ways weakens. And, as with maneuvering relative to another vessel, our "strength" in the currency will change. One month after the above citation, one reads:
"The role of the dollar in global trade is even more pronounced, accounting for 96% of trade transactions in the Americas, 74% in the Asia-Pacific region, and 79% in the rest of the world, excluding Europe where the euro dominates, according to Federal Reserve data for 1999-2019."As to the Fed:In "China Begins to Erode US Dollar Dominance in Global Trade Agreements," Gro Intelligence," 16 May 2023
Source: https://www.gro-intelligence.com/insights/china-begins-to-erode-us-dollar-dominance-in-global-trade-agreements
"The U.S. Government does not own shares in the Federal Reserve System or its component banks, but does receive all of the system's annual profits after a statutory dividend of 6% on their capital investment is paid to member banks and a capital account surplus is maintained. The government also exercises some control over the Federal Reserve by appointing and setting the salaries of the system's highest-level employees." WikiSo the government receives income from the Fed, making the government, in a way, both the fox and the hen house.Source: https://en.wikipedia.org/wiki/Structure_of_the_Federal_Reserve_System
The above citations from February and then May suggest change is going on. If the IMF and BIC see changes, via competing entities offering other kinds of "settlements" and slipping out of the reach of a unipolar control, then much is up for grabs.
This is in part why your statement is important, "Actual trade is still what matters," and, as above, our US trade is lessened because other trade is growing as a share of global trade. With Saudi Arabia and Iran showing willingness to work outside the so-called "petrodollar," things could change more quickly.
What seems interesting is that "competition" to a unipolar world is increasing. The sanctions erected over these last years are not assisting in increasing trade throughout the world. They are annoying other nations -- rightly or wrongly -- and that will give impetus fir those annoyed to seek alternatives.