USD and Global Trade

The US dollar has been the one of the strongest and most established currencies in the world. Being the leader in the world’s economies, the U.S. GDP, valued over $10 trillion in 2001, is the highest. The liquidity in all of the U.S. markets and the historical returns that are made on investments have caused foreign investors to spend large amount of capital on purchases of U.S. assets. Foreign direct investments made up 40% of global net inflow to the US, and it alone, holds 71% of total foreign savings of the world. Though it consistently has extremely large trade deficits, the USD continues to be a highly traded currency. (more...)