The author, David Waring, is the founder and community host of www. InformedTrades.com, an online community devoted to helping traders of all experience levels find the quickest path to profitability. His site does this by organizing all of the best free video and text trading education and news from around the Internet, into one easy to navigate resource.
- David Waring continues his discussion of the major factors affecting the position of the U.S. dollar as the “world’s reserve currency.”
In the December issue of The Forex Journal, we discussed the main factor that will determine whether the U.S. dollar remains the king of the currency world – its status as the world’s reserve currency. In this article, we will discuss how countries that peg their currency to the U.S. dollar have an affect on whether it remains the reserve currency of the world or not.
One of the main reasons that many countries hold U.S. dollars is so they can use those dollars to fix the value of their currency to the U.S. dollar. They do this to give their currency and economy more credibility. Their hope is that this will lead to a more stable economic environment and/ or keep the price of their goods low in comparison to other countries, so their exports will be more competitive.
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