Special Report:

The US dollar, the euro, the yen ... are among the most popular international currencies that are accepted in most international transactions, and the reserve currency is the other name for the global currency accepted for trade globally.

The US dollar constitutes 64% of the official foreign exchange reserves globally, followed by the euro by 21%, and the opportunity for the single European currency to become a global currency in the event of the disappearance of the euro zone crisis.

Stronger Currency

The relative strength of the American economy supports the value of its currency, and cash is one of the indicators of the dollar's role as a global currency, as more than a third of the world's gross domestic product comes from countries that link their currencies to the dollar.

On the Forex market, the US dollar is one of the most active currencies, accounting for 84.9% of all transactions, and the euro is second (39.1%), followed by the yen (19%).

And if the American currency represents half of each major currency pair that constitutes 75% of transactions, then it can be said that the US dollar is the king in the Forex market.

What strengthens the important role of the US dollar in the market is that the United States has the largest and most liquid financial markets in the world, as well as a stable political system and military power at the global level.

The US dollar is adopted as a medium of exchange in many cross-border transactions, for example, oil is priced in US dollars, so if Mexico wants to buy oil from Saudi Arabia, the counterpart must be in US dollars, even if it is forced To sell the peso for that.

Confidential Secret

The size of the economy is not the only one that determines the importance of the United States in the global financial system. After all, America remains the best institutional country in the world based on a set of checks and balances between the various government agencies, and the establishment of the rule of law enhances confidence Foreign investors in the American system.

The green American is on the throne of the global monetary system, as it is a safe haven for investors during the turmoil, so we find that the global financial crisis in 2008 that caused the collapse of the housing market in the United States strengthened the position of the global dollar, thanks to the high demand for Safe American Financial Assets.

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