The Dollar: The Universal Financial Language
The dollar is not just a currency; it’s the backbone of the global economy. Discover how its power directly influences your life and the world.
Undeniable Dominance
The United States dollar (USD) is the world’s leading reserve and transaction currency. Its influence is reflected in strong figures that demonstrate its central role in global finance.
More than 60% of global central bank reserves are held in dollars, reflecting worldwide trust in its stability.
The Engine of Trade
From oil to coffee, the vast majority of international transactions are settled in dollars, simplifying trade but also creating dependencies.
Nearly 80% of global trade is conducted in dollars, cementing it as the world’s dominant transactional currency.
From Local Currency to Global Power
The story of the dollar is the chronicle of how a national currency became the axis of the world’s financial system through key historical milestones.
1944: The Bretton Woods Agreements
The dollar became the world’s reference currency, with its value directly backed by gold. This marked the beginning of its official dominance.
1971: The End of Convertibility
President Nixon severed the dollar’s link to gold. The fiat dollar was born — its value now based on trust in the U.S. economy, a shift that solidified its flexibility and power.
Today: The Undisputed King
Despite challenges from other currencies like the yuan, the dollar remains the leading reserve, trade, and safe-haven currency in times of global uncertainty.
Global Impact: A Double-Edged Sword
The strength of the dollar doesn’t affect all regions equally. For some, it’s a pillar of stability; for others, it’s a source of volatility.
Regional Sensitivity to the Dollar
Latin America shows high dependence on commodities and dollar-denominated debt, while Europe, though affected by energy trade, finds an important counterbalance in the euro.
How to Protect Your Finances
You can’t control the value of the dollar, but you can make smart decisions to reduce its impact on your wallet.
Diversify Your Savings
Don’t bet everything on your local currency. Consider holding part of your assets in dollars or global investments.
Avoid USD Debt
If you earn in another currency, dollar-denominated debt can spiral out of control if your currency devalues.
Follow the Fed
U.S. interest rate decisions directly impact the value of the dollar. Stay informed!
Invest in Real Assets
Real estate or gold can act as a store of value during periods of currency volatility.