5 Most Powerful Currencies in the World

1. U.S. Dollar

The U.S. Dollar, or the USD, is the most powerful currency in the world, and that comes as no surprise. It is pretty much the most desirable currency in the world no matter where you live or travel to. A street vendor in Baghdad or a waiter in Istanbul will likely accept the U.S. Dollar as payment or tip. The currency has universal recognition and is the most traded currency in the world.

It accounts for nearly 85% of all forex trade with a volume of about $6.6 trillion, as of the present. According to the International Monetary Fund (IMF), around 59% of the global foreign reserves in central banks of different countries are maintained in USD, which has earned the greenback the status of a global currency.

The USD has been the world’s most dominant currency since World War II and continues to keep this status and is the preferred currency for investors during times of financial distress, because they expect it to retain its value. A number of countries have pegged the values of their currencies to the U.S. Dollar, including Saudi Arabia, Qatar, the United Arab Emirates, and Hong Kong. Seven countries recognize the USD as legal tender in a process known as dollarization. These include Ecuador and Zimbabwe, among others.

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