Marketwatch (2018) | July 9, 2018
The U.S. dollar still dominates international trade, and will for a while
President Donald Trump’s tariffs have caused some champions of globalization to predict the decline of the dollar BUXX, 0.01% as the global currency as other nations take the leadership in cobbling together free trade areas—for example, the TTP less the United States in the Pacific, and China’s attempt to cobble together economic cooperation arrangements in the region.
Central banks around the world hold major foreign currencies—dollars, euros, yen and so forth—to back up their fiat money. Gold US:GCQ8 can’t be mined fast enough at reasonable cost to accommodate economic growth, and its value—what it buys in soybeans and software—fluctuates much more than major currencies.
As New York offers a deep, sophisticated and reliable capital market and traders can buy virtually anything in America, central banks must hold dollars above all other major currencies to be taken seriously by private investors.