Analysis For The Effects Of US Dollar In Financial Crisis

USA gets its hegemony due to the two world wars with its US Dollar becoming a major currency being used in modern economic society. The world economy made a more orderly progress through the establishment of international monetary system in which US Dollar as a leader currency. At the same time, the financial competition among countries becomes more intense, and currency is one of the important focuses. The economic position of US Dollar cannot be replaced at the present and for a long run. Under the frame of current world monetary system. US Dollar is not only a currency, it is a symbol of economic and political interests. Studying and discussing US Dollar is becoming significant to understand modern economic and political system.The paper discussed US Dollar from its two points:US Dollar exchange rate and interest rate. It gave two cases including Asia financial crisis and subprime lending crisis happened in USA. It also analyzed US Dollar long term exchange rate trend, its influences during past financial crisis, and its economic effects caused by its exchange rate fluctuation. Through comparing past financial crisis, the paper indicated some common problems and pointed out an important role that US Dollar played as an financial instrument. As a world currency, US Dollar fluctuation can bring critical effects on world economic system. The paper drew some lessons from these effects to RMB appreciation and internationalization.