The US dollar is undoubtedly the world’s “global currency.” Not only is it the most recognized of all the world’s currencies, but it’s also one of the most powerful. Forex traders across the world keep a close eye on the movements of the US dollar, and that goes for whether they are trading the greenback or not.
But what gives the greenback this unusual status in the forex trading world? There are various factors involved in the development of this status, and it’s worth thinking closely about what each of these are, even if you’re not invested in the dollar. This article will delve into these explanations.
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History: Bretton Woods Agreement
While the US dollar’s dominance in the modern-day appears on the face of it to simply be the product of lots of relatively recent forces, the reality is that the dollar’s position was entrenched by an agreement made decades ago. As the Second World…