>"While the US Federal Reserve’s aggressiveness in easing financial conditions has succeeded in halting a further decline in the US economy, companies could still go bankrupt."

The US Congress is considering a fresh round of relief to support the US economy that is likely to cost at least US$1 trillion on top of the more than US$2 trillion passed earlier this year. Leaders of the Democratic-led House of Representatives and Republican-led Senate will have to reach a compromise on separate bills, with the House having already passed a US$3 trillion package, while the Senate is expected to pass a smaller bill of about US$1 trillion in the coming days.

“The concern isn’t whether the US dollar will see an accumulated decline of 30 per cent in the future, but whether there will be a blow-up event that causes a sudden loss of confidence in the US dollar, and its market to collapse,” said Zhu, who is currently head of the National Financial Research Institute at Tsinghua University in Beijing.