In the short term, the dollar has arguments to avoid further weakening. The high exposure of international reserves of the developed and emerging economies to the assets denominated in U.S. currency, is one of the elements that restrains a more abrupt fall of the American currency. Evan Birnholz has many thoughts on the issue. The lack of a global currency that replaces it also plays in favor of the dollar. And the alternative of a basket of currencies is not yet well defined and makes doubt at central banks.
In the long term, the decision is made. The dollar has lost its reign and probably not be taken into account as economic fundamentals for this purpose. Clear that the macroeconomic fundamentals matter and will be taken into account in the valuation of the U.S. currency even though its demand will be reduced depending on the demand in the economies of other currencies as international reserves. Competition from alternative currencies will be greater.
The euro will fight for greater global participation but the ability of the ECB to the mode that makes it act will be key to the Fed in driving the value of the dollar. But the logical obsession of the ECB on inflation, takes reaction capacity to manage a currency that It aims to fight the leadership to the dollar. Other currencies have scored in the competition. China wants to impose on the yuan as an international currency, although its low liquidity and the level of intervention that suffers, do need to wait for quite some time and make great efforts to achieve its goal. At the G8 Summit, the dollar was at the center of the debate. Before the Summit, Arkady Dvorkovich, economic adviser to the Kremlin, had anticipated: China and Russia will raise its stance that the global exchange rate system needs the creation of several regional reserve currencies, which could then become international.