Why the US dollar is the world Currency

 MAJOR CURRENCY PAIRS, ALL AGAINST US DOLLARS

The seven most actively traded currency pairs in the forex market today, also known as major ones, all trade against the US dollar.

This includes the following pairs, ranked by trading volume:

• EU euro against US dollar: EUR/USD

• US dollar against the Japanese yen: USD/JPY

• British pound sterling against the US dollar: GBP/USD

• US dollars against Swiss francs: USD/CHF

• Australian dollar against the US dollar: AUD/USD

• US dollar against the Canadian dollar: USD/CAD 

• New Zealand dollar against the US dollar: NZD/USD

As mentioned above, in its role as the world's largest reserve currency, the US dollar was the most traded currency in the past. The dollar is still important as more than 86% of all currency transactions are still pegged to the currency.

Some major currency pairs and almost all minor currency pairs are listed with the US dollar as the base currency 

 

Why the US dollar is the world Currency

A global currency is a currency accepted for trade throughout the world. Some world currencies are accepted for most international transactions. The most popular are the US dollar, the euro, and the yen. Another name for a global currency is the reserve currency. According to the International Monetary Fund, the US dollar is the most popular. In the fourth quarter of 2019, it represents more than 60% of all known foreign reserves of the central bank. This makes it the de facto world currency, although it has no official title. The closest reserve currency is the euro. It represents 20% of the known foreign exchange reserves of central banks forex market brokers in India. The chances of the euro becoming a world currency have been compromised by the crisis in the eurozone. Revealed the difficulties of a separate monetary union.

World's strongest Currency

The US dollar has long been the strongest currency in the world. Its position as a de facto reserve currency is accepted for trade throughout the world. According to the International Monetary Fund (IMF), more than 61% of the world's foreign exchange reserves are held in dollars. Even China, the fastest-growing large economy, owes more than $ 1 trillion. Additionally, 80% of all $ 100 bills in circulation are held outside of the United States and approximately 90% of foreign exchange transactions are in US dollars. But the dollar has not always been that strong. In the 19th and early 20th centuries, the British pound was the world's largest reserve currency. It was not until after 1944 that the US dollar became the main reserve currency.

Despite trillions of dollars in foreign debt and persistently high deficit spending, the United States still has confidence in its ability to meet its commitments. For this reason, the US dollar remains the strongest currency in the world. It could remain the world's top currency for years to come. However, its current status as number one on the dollar is controversial. Countries like China and Russia believe that a new global currency that is not backed by a single nation is long overdue in this increasingly integrated global economy read more 

Contact us