Study On International Position Change And Influence Of US Dollar At The Beginning Of The 21st Century

After Bretton Woods system collapsed, US dollar had no longer pegged to gold. But US dollar is still the main valuation international currency, international reserve currency and foreign currency trading currency, many country's exchange rate systems take US dollar as the basis. However, as a result of many factors, e.g. the U.S.'s "twin deficits", interest rate differential, the American domestic macroeconomic policy factor and so on, the exchange rate of US dollar vs. major country currency has fallen since 2002. Especially after the 2008 financial crisis, the dollar is shown a sharp downward trend, as the global center currency, the US dollar faces serious challenge. In fact, the preference of US dollar suggests that the US dollar's international position is weakened. This Tendency not only impacts on the American economy, but also impacts on other countries such as Europe and Asia. Therefore, the sustainability of US dollar's international position becomes the focus once more. This paper is divided into six parts to discuss the reasons for the weakening US dollar's international position, the influence, the dollar's future development and proper measures of China.The first chapter is the introduction. it has mainly introduced the research content, the status at home and abroad, significance and proposes.The second chapter has reviewed the evolving process of the position of US dollar. It has introduced the establishment of US dollar's international position. the weakening of the US dollar after the Bretton Woods System, as well as the US dollar's performance under the Jamaican System.The third chapter studies the US dollar's weakening performance since the Bush Administration. At the same, this chapter analyzes the reason for the US dollar's weakening performance which from the objective aspect and the policy aspect. The objective aspect includes the American twin deficit, US's economy development condition, the rise of the euro as well as the safety of U.S. dollar assets. The policy aspect includes American exchange rate policy and interest rate policy.The fourth chapter is how the US dollar's weakening preference impact on the economies of US, as well as other world important country, e.g. Euro zone, Japanese and China. Especially, it thought that the US dollar's performance will make China faced a dilemma in the macroeconomic regulation and control policy.The fifth chapter is US dollar's future. It has introduced that the US dollar will face the currency competition from the euro even Asian region currency in the future. Through analysis and comparison, we think that in the short-term US dollar will still be the international leading currency, because the euro and Asian Yuan aren't certainly and mature. But the diversified tendency of international currency will be irreversible in the long-term. The US dollar's hegemonic position will never return.The sixth chapter is measures that our country should adopt to face the future international currency pattern. We should take measures to adjust the size and structure of foreign exchange reserves, promote the reform of RMB exchange rate formation mechanism, strengthen the RMB exchange rate flexibility and financial supervision, safeguard China's financial security.