It is so interesting to know several facts about dollar as the main currency in this recent global trading. Since the pandemic which was started in March 2020, USD has lost its 1/10 of its value to Euro.
That is continued to be weakening than the Yen and Pound. However, aside from that condition, that currency still maintains its title as the international currency right now. What are the reasons?
The biggest answer is that it us backed up by the great economic power of the United States. Besides that, there are still some other facts to know. Below is the further details.
The Facts About Dollar That Dominate The Global Transaction
The main function of the USD is the use of it as the world currency. Among the other, the American currency is still dominating. That is why; the American economy, politic, or social event have a great impact.
Usually, it triggers the significant move in most financial segment market. In the forex market for about 90% sales always involve the USD. It straightly shows the role of that currency.
The role is really strong for the market participants. They always make it as a consideration before taking an action in a global trading. It is done to avoid the loses.
It Is Used As The Safe Haven
One of the facts about dollar is its function as the safe haven. It is because the traders think that America has the safest and most developed market in ghe world. Unfortunately, a thing shakes it.
It is actually the 9/11 moment which makes the market’s trust decreased and the US currency was slipped. The foreign investors included the central banks cut their ownership of the dollar.
It is because the interest rate decreased and the uncertainty increased. Aside from that situation, dollar is still surviving as the safe haven asset. This COVID-19 pandemic shows a surprising thing.
The demand of cash was rocketing and the USD became the target of many investor. That made the gold commodity as a classic safe haven was declining so fast. Dollar became the top list in 2020.
The Benchmark of Other Currencies Exchange Rate
The unique thing to know is that there are only a few people who know about the dollar peg. It is a condition where a country decide its currency exchange rate to the USD. How to do that?
The central bank in that country will handle the value of that exchange rate to make it is more stable. In fact, that becomes a policy which is followed by many developed countries to anticipate the economic issues.
The examples are like deflation and Inflation. Now, at least 66 developed countries have been pegging their currency to the USD. Some also uses it as the legal payment equipment there.
In some places, this thing is quite common. However, so many people are still not knowing about one of these facts about dollar. Now you know it and can apply it.
USD Influences The Forex Market
The American dollar always influencing the forex market since it is the main global currency. That is why; always choose the best forex broker if you want to be a global trader and play with the currencies.
One of the recommended options is for sure the Didimax forex broker. It has the complete featured, secure system, and years of experiences. It is a smart choice for a beginner or even the professionals.
The real trading situation is available and you will be supported by the latest important news everyday. So, join Didimax right now after you know about these facts about dollar and get the profit.
