Why is the Dollar the World Currency? Can the Dollar Crash in 2020?

Have you ever wondered why the dollar is the global currency? Who decided that this should be the leading currency in the world and why is the dollar the reserve currency, as well? And why is the dollar so strong right now anyway, with some of the other major currencies plummeting?

It is true that in the wake of the coronavirus outbreak and the subsequent global lockdown measures that undermined the economies of whole countries and the world in general, many currencies, along with the global markets, fell and some are continuing to fall. GBP, for instance, experienced lows it hadn’t seen since 1985.

So, why is the dollar the global currency still and how is it that it still manages to stay afloat? There are several reasons for this. One is the high demand for US safe haven assets that has skyrocketed in these times of economic uncertainty. And another is that there is an actual shortage of the greenback in the funding and liquidity markets, which lends it the scarcity factor as well.

But of course, there are also other factors that need to be taken into account in order to fully answer the question of why is the dollar considered to be the global currency. And we will explain them today, along with why there may be a dollar crash coming soon. According to some analysts, if there’s a year that looks like one for a significant dollar crash, 2020 would have to be it. Predictions are, in fact, for immense drops of up to 35%, but we will talk about that here as well.

Watch the full video as we offer answers to all these questions and a thorough explanation as to why the dollar is so strong at the moment.


If you liked our “Why is the Dollar World Currency?” video, then please give it a thumbs up before you go. And if you’d like an even more in-depth answer to the question of why is the why is the dollar the worlds reserve currency, let us know in the comment section below! Be sure to subscribe to the Capital.com channel for more exciting trading news and our take on a potential dollar crash and how investors can cope with it.

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Please note that this video has been uploaded prior to the adoption of the product intervention measures on CFDs to by the European Securities and Markets Authority (ESMA).

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