The United States dollar

The United States dollar is referred to as the U.S. dollar, or Federal Reserve Note. It is the official currency of the United States and its overseas territories. It is divided into 100 smaller units called cents.
The U.S. dollar is the fiat currency most used in inte
ational transactions and is one of the world's most dominant reserve currencies. In addition to holdings by central banks and other institutions, there are many private holdings, which are believed to be mostly in one-hundred-dollar banknotes (indeed, most American banknotes actually are held outside the United States). All holdings of U.S.-dollar bank deposits held by non-residents of the United States are known as "eurodollars", regardless of the location of the bank holding the deposit (which may be inside or outside the U.S.).
The U.S. dollar is an important inte
ational reserve currency along with the euro. The euro inherited this status from the German mark, and since its introduction, has increased its standing considerably, mostly at the expense of the dollar. Despite the dollar's recent losses to the euro, it is still by far the major inte
ational reserve currency, with an accumulation more than double that of the euro.
Several countries use it as their official currency, and in many others it is the de facto currency.[1] It is also used as the sole currency in two British Overseas Territories: the British Virgin Islands and the Turks and Caicos islands.

Since 1944, when nations around the world ratified the Bretton Woods Agreement, the US dollar has been the most dominant currency in the world.
The US dollar is the defacto world currency and other nations just peg their currency to the US dollar. The US dollar in tu
is backed by the gold reserves with the promise of redeeming dollars for gold anytime. Being back by the precious commodity, the US dollar provided other nations with a hard currency which they could keep as reserves and a means to settle inte
ational trade transactions. Everyone in the world accepted the US dollar as payment for transactions.
However, this system eventually came to an end in the year 1970 because the US’s widening trade deficit led to fears on the weakness of the dollar. The fixed rate system was then replaced with floating rate system where the value of each currency is allowed to be value by market forces. In today’s world, the role of currency reserves is not longer confined to settling inte
ational trade differences but also used as investment funds and protection against currency market speculators.
Although most countries no longer pegged their currency, the role of the US dollar in world economy is still very prominent. It is still the defacto reserve currency held by almost two thirds of inte
ational central banks. This status as the reserve currency means that most commodities are priced and traded in US dollars. In order to make the transaction, US dollars must be used. Therefore, it is key that the US dollar maintains its role and strength in the world currency market.
In recent years however, the size of the US trade and budget deficit along with its gigantic national debt has prompted many to question if the world’s strongest economy can maintain the dollar as the reserve currency. This is couple with the fact that the Euro, currency of the European Community has become much stronger since its introduction. With the Euro as a viable alte
ative to the US dollar, the...