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09

May

The Dollar Currency Against Other Currencies

Looking at the dollar, one might be forgiven to think that it is a god compared to other currencies that are in existence in the world. Not just any dollar, but the American dollar to be specific. Its dominance in the field of finance as well as its acceptability in all the countries in the world makes it a super currency. This is reflected in the manner in which the dollar performs across all the currency markets in the world.



The Dollar and its acceptability

One fact is that the American dollar is a universally acceptable currency. Its use is not predicated on national boundaries or geographical divides that exist throughout the world. The American dollar is so acceptable around the world, some individuals from other countries other than America have embraced the currency in such a manner that in can be said to be their national currency. Indeed. Citizens in Zimbabwe, a country in Africa, have taken to using the American dollar as their preferred currency, as opposed to using their national currency, the weaker Zimbabwean dollar. The dollar is also in use in countries in Europe as well as the Middle East.

The Power of the Dollar

In order to understand the power of the dollar, one only needs to look at the economic news from around the world. One thing that stands out is the fact that all figures expressing financial sums are stated out in dollar terms, irrespective of the region where the news emanates from. Rarely does international financial news give monetary sums in the local currency from where the news is based on. Grants, loans and other forms of monetary gifts that are given to developing countries are in most cases given out in dollar form.

No other currency in the world is as well-known as the dollar. It is not uncommon for children to hear of the word dollar before they can learn the name of their local currency. In order to understand the prominence of the dollar when compared against other currencies, it is quite important to understand its backdrop.

The backdrop of the US Dollar

The American dollar is the official currency of the United States of America. The United States of America is one of the most powerful countries on Earth if not the strongest. The aspect of strength is in military capability, economic power, political stability as well as population. The combination of all these aspects gives the currency the ability to dominate the world of currency due to the fact that many countries will want to relate with the USA, will want to trade with the USA and will rely on the USA for aid in several ways. This gives the American dollar the circulation power all over the world. This ensures it is present in almost all the countries in the world. So common is the dollar that it can be used for local trades in the remotest of areas all over the world.

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