Argentina and Brazil Abolish Dollar in Bilateral Trade
Was not aware of this -- despite living in Brazil... so thanks.
Interesting indeed, but maybe not so bad for the dollar:
[Both sides said that bilateral trade would save forex costs, especially for smaller businesses.] Very positive, though not necessarily for the dollar.
[Brazil sees the move as a first step towards more monetary cooperation in the Mercosur area that other countries could join as well."We’re giving a crucial step for a future regional monetary integration” said Lula da Silva during the official reception. "We are going to abolish the dollar as a currency in our trade" he added.]
This is the key to it all... future regional monetary integration. I am not an international economist, but I believe that consensus among them is that monetary Integration in Europe (the creation of the Euro) was a net positive development. Monetary integration in LatAm would probably be net positive, too.
[Lula da Silva pointed out that he wanted Brazil and Argentina's trade balance to be more balanced. Argentina had a 2.7 billion US dollars trade deficit with its larger neighbor Brazil in the first half of the year.]
Argentines would never admit it but, economically, they are are a province of Brazil.