Question

a US dollar's position is the world dominant reserve currency. in 2 sentences, briefly explain this in the global trade.

Answer 1

The US dollar is the world’s dominant reserve currency because most international trade invoicing, commodity pricing (especially oil), and cross‑border payments are conducted in dollars, and central banks hold large dollar reserves for liquidity and exchange‑rate stabilization. This dominance lowers transaction costs and provides deep markets for trade financing, while also linking global trade competitiveness and capital flows to U.S. monetary policy and dollar exchange‑rate movements.