We all know the US dollar is considered the world’s reserve currency although attempts at moving to other currencies continue. Since most of our global investments are made in US dollars, it was important to me to understand if there was any risk in this. The bottom line – it’s highly unlikely the US dollar will be replaced as the world’s reserve currency any time soon.
– 60% of all known central bank reserves are held in dollars, the euro is second at around 20%, the yen is nowhere.
– 90% of all global forex trading involves the US dollar
– 2/3rds of all US currency circulates outside the US
Its not that the US dollar is so squeaky clean – it’s just that its cleaner than all the other currencies out there and relatively stable – compared to any other contender.
A few articles of interest:
This article’s title suggests the US dollar supremacy could quickly fade – but when you read it the author contends the US dollar’s hold as reserve currency would be difficult to dislodge.
This article provides the facts as to why the US dollar continues to be the world’s reserve currency.