Excess Sovereign reserve currency calls for dollar-frequency Sell-off

This week at the UN's three-day global economic and financial Summit, the call for a supranational international reserve currency sounded again. China, the largest creditor of the United States, reaffirmed its commitment to the establishment of a supranational international reserve currency after March this year. Yu Yongding, a former adviser to the Chinese central bank, said that replacing the dollar with the new international reserve currency was the core issue of the reform of the international monetary system.　　Again, the dollar's status has been questioned, causing the dollar to sell off last week.　　Although the Fed said in Thursday that US inflation would remain subdued for some time and made it clear that it would maintain low interest rates for a long time, the dollar hit a recent weekly record drop against major currencies amid a looming threat to the dollar. The dollar slid 0.9% per cent against the euro last week, from 1.3937 on June 19 to 1.4056, the biggest week since May 29, according to the data. The dollar slid 1.1% per cent against the yen, falling from 96.27 to 95.18, the third consecutive week. Real, Brazil's new currency, rose 2% to 1.9363 against the dollar, its biggest weekly gain since the month. The dollar depreciated 2.6% per cent against South Africa's rand, to 7.8926, down 1.4% to 7.8002 against Swedish krona.　　In this connection, UBS foreign exchange strategist Zimanir said the dollar's status as an international reserve currency is being questioned, so the market has good reason to sell the dollar. Last week's 10-year Treasury yield saw its biggest drop since March, as markets expect the Fed to keep interest rates unchanged in the second half of the year.　　At the same time, yields on 2-year bonds and 10-year bonds were reduced to 2.43% per cent, near the lowest level since May 20. The issue of dollar status has been the focus of attention since the Federal Reserve began buying bonds in March this year. Many inside and outside the industry worry that the Fed's purchases of thousands of billions of dollars in long-term Treasury bonds will increase the money supply substantially, eventually triggering inflation and causing the dollar to depreciate. This will have a greater impact on countries around the world, especially China, the country's largest creditor.　　Thus, in March, when the Federal Reserve began its action, China called on the US to secure its assets, and the governor of China's central bank, Zhou Xiaochuan, called for the development of the IMF's Special Drawing Rights (SDR) as a super Sovereign reserve currency and a gradual replacement of the dollar. Russian President Dmitry Medvedev has endorsed the idea of a hyper-sovereign reserve currency, and 5th this month he also proposed that countries use a hybrid regional reserve currency to reduce their reliance on the dollar. But Russia's deputy prime minister and Finance minister Kurdish 13th after the summit of the eight countries to express their full confidence in the U.S. dollar, the current discussion over the Sovereign International reserve currency is premature. Japan's finance minister and Yosano also expressed confidence in America's strong dollar policy.