After US Treasury Secretary Yellen strongly supported the "market-oriented dollar exchange rate", President Joe Biden shouted "not worried about the skyrocketing dollar" and blamed other countries for the problems of global economic growth.

"I'm not worried about the skyrocketing dollar, I'm worried about the rest of the world," Biden told reporters at a campaign event in Portland, Oregon on Saturday. "

He reiterated that inflation was global and said "the problem lies in the lack of economic growth and sound policies in other countries".

At the annual meeting of the International Monetary Fund (IMF) on Friday, Yellen reiterated that fighting inflation is a top priority for the Biden administration to support the market-determined exchange rate of the dollar.

The remarks made by Biden and Yellen are reminiscent of what Connery, the former US Treasury Secretary, once said: "the dollar is our currency, but it is your trouble."

Ms Yellen also acknowledged that tighter monetary policy in developed countries would have spillover effects on other countries. This issue has also become one of the focus topics in the autumn annual meetings of IMF and the World Bank in 2022. Economists believe that the rapid strengthening of the dollar has affected the macro-economy of almost all countries, especially the huge spillover effects on emerging markets and developing countries.

The hegemony of the US dollar has been bitter for a long time, and many countries have launched a "reverse currency war".

The comments by Biden and Yellen come at a time when other countries are still in the midst of a "currency storm" caused by the dollar. As the core of the international monetary system, the continued appreciation of the US dollar has put other currencies under pressure and depreciated, aggravating the upward pressure on inflation in other countries.

Since the Fed raised interest rates, the dollar has continued to strengthen, with the dollar index up 18.5% so far this year.

After that, more and more countries began to fight back and intervene in the foreign exchange market. Japan, South Korea, India and other countries have waged a "reverse currency war", selling large amounts of US dollars and buying their own currencies.

The three major obstacles in the new Plaza Accord

The move has led to speculation that countries that have long suffered from dollar hegemony will unite to sign the new Plaza Accord and join forces to sell dollars and defend their currencies.

In the 1980s, the monetary and fiscal policy of the United States tightened sharply and the US dollar rose sharply. in order to protect their currencies, the G5 countries reached an agreement and held a meeting at the Plaza Hotel in New York on September 22, 1985 to sign the Plaza Agreement.

Then the five countries joined forces to sell the dollar, followed by a sell-off frenzy in the financial markets, leading to a sustained sharp depreciation of the dollar.

37 years later, will the dollar challenge trigger the new Plaza Accord?

For now, outsiders are skeptical.

According to the analysis, there are three "obstacles" in front of the new "Plaza Agreement":

First, given the differences of interests among countries and the gradual reversal of the trend of globalization, there is little sign that countries are likely to reach similar cooperation agreements.

Second, the US is facing its worst inflation in 40 years and there is no reason to weaken the dollar.

Finally, the situation in the global foreign exchange market is very different today than it was a few decades ago, and the scale of foreign exchange trading has greatly increased the difficulty of this operation.