PowerShares DB US Dollar Index Bearish (UDN)

[zsvq1p]

I think you make a good point... Thing is China won't want a lower dollar. That means we pay them more for goods. Demand will drop. US makers will make more profit hiring more people. Gold might take off! This news could be already built into the market.

NEW YORK (Commodity Online)08 May 2012 at 18:05 IST: Iran is reportedly accepting Yuan as a settlement currency for its oil trade with China, posing a significant threat to the dominance of the US Dollar as the international trade currency, especially if other countries start to barter similar deal

As per the Financial Times, Iran uses the Yuan to purchase goods from China. Some of the trade is even in barter form. For eg; China's Zhuhai Zhenrong oil trading company provides services such as drilling to Iran in exchange of oil.

Increasing US sanctions have been straining Iran from its oil revenues as its major markets began to cut back oil imports from the country in a bid to comply with US requests. But the sanctions may boomerang back at the US with countries starting to use their respective currencies instead of the US Dollar for oil trades.

Earlier, India and Iran had agreed on a deal whereby India would pay about 40% of its oil imports in the for of Indian Rupee and Iran could use the currency to purchase goods and services from India.

And now with China joining India in a similar deal with Iran, it has to be seen if other countries over the world follow suit.