Challenge coming to U.S. dollar in multipolar world: The Guardian

LONDON, Aug. 28 (Xinhua) -- A single, all-powerful reserve currency sits oddly with a multipolar world, and a challenge to the U.S. dollar is coming, an opinion article published by The Guardian said on Sunday.

As further increases in interest rates in the United States seem possible, what the Federal Reserve does in the coming months affects life well beyond the U.S. shores, Larry Elliott, the British newspaper's economics editor, noted in the article.

Commodities such as oil are priced in dollars, and countries that borrow in dollars can see their repayments soar if the U.S. currency rises in value, Elliott said.

"The U.S.'s financial hegemony is not universally popular. One of the motivations for the creation of the euro was that a European single currency would be a rival reserve currency to the dollar," he added.

U.S. Treasury Secretary Janet Yellen has expressed concerns about the long-term consequences of using financial sanctions as a tool of U.S. foreign policy, Elliott mentioned.

There was a risk "over time it could undermine the hegemony of the dollar," Yellen was quoted by the article as saying.