The Fed Expects The US Dollar To Fall By &Nbsp; &Nbsp; G20 Will Benefit The US Dollar.

Fed's move angered the world's major countries, and in fact made the hopes of resolving the current account imbalances in the upcoming summit of the group of twenty (Group of 20) in Seoul completely shattered.

Maintaining the status quo will only boost the US dollar because it increases the risk of competitive devaluation of currencies, and a sharp fall in risk appetite will enable investors to pursue a safe haven again.

Ironically, resolving imbalances has become more urgent than ever before.

The latest trade figures released by the Chinese government show that although China's exports to the US amounted to US $25 billion last month, the US exports to China amounted to only US $7 billion.

However, it is said that

G20 sources also said that although the United States proposed that G20 members should limit their current account surpluses, the communiques would not involve any specific figures in the end.

In view of the difficulties of investors in the G20 conference, they have reason to buy dollars: this will increase the risk of competitive depreciation in Asian economies, so as to ensure that the weakness of the US dollar will not harm their exports.

There is no doubt that Asian countries will remain vigilant against the inflow of hot money, and may eventually adopt capital controls and intervene through oral or even direct market entry. This will only increase uncertainty in the global market and make the hedging characteristics of the US dollar more attractive.