Iran has responded to United States rhetorical attacks by selling oil in euros rather than dollars and by significantly reducing its foreign exchange holdings of dollars. China, which “signed last year a long-term $100 billion deal with Iran to develop Iran’s giant Yadvaran oil field,” and “which now holds $1 trillion in foreign reserve holdings, announced March 20 it will no longer accumulate foreign exchange reserves.”
The United States currency is now dropping, “as dealers worried over the outlook for the US economy. . . . With many believing the dollar has to weaken further to ease its trade and current account deficits, free-floating currencies such as sterling, the euro, the Australian dollar and the Canadian dollar are taking the brunt of the currency’s slide,” which is to say that they are gaining value against the U.S. dollar, adversely affecting their competitiveness against the U.S. in exports.