Since the demise of the Sterling as the world’s premier currency — which began in the First World War and slowly eroded its dominance through the end of the Second World War — the US dollar has played an importance role in shaping global economics. It has been the most powerful currency in the world.
In fact, the US dollar is the benchmark for virtually every commodity and currency around the world. All commodities and precious metals are quoted in US dollars.
Furthermore, many countries often quote their gross domestic product (GDP) and other official statistics in US dollars rather than their own, for immediate international understanding.
US Dollar Price Rules
Because of the US dollar’s dominance, it can be viewed as the more trustworthy currency. It’s the ‘official currency’ in places such as Ecuador, El Salvador and East Timor, for example. However, it’s often accepted in other countries as a supplement to the official currency, in places like Mexico, Canada Barbados and the Cayman Islands.
The US dollar is the most widely used currency because of it’s perceived stability.
Just like any other currency, the US dollar’s value fluctuates based on economic factors within the United States, as well as central banking policies set by the Federal Reserve Bank.
Here at Markets and Money, we regularly provide insight into what’s happening in the global economy. You’ll find everything you need to know about the US dollar here.