Currencies

Before the U.S. dollar became the world's reserve currency that honor was held by Britain, then France, the Netherlands, Spain & Portugal and the U.S. dollar is no less susceptible to succumbing to the same change. In fact, many nations have been actively turning their back on the dollar over the past decade.

Western central banks, by debasing their currencies, have produced little more than financial ammunition for speculation on a grand scale. We saw the effect of a flood of this accumulation into the dollar over the last 18 months, and we are about to see the opposite effect as it ebbs away. What will the implications be?

The motto “In God We Trust” has appeared on U.S. coins since 1864 and began being printed on paper currency in 1957 but now another lawsuit by a prominent atheist has been filed in an effort to have the motto removed from all U.S. currency.

It is the size, stability, and liquidity of a country’s financial markets that are the major underlying factors to determine the strength of a reserve currency and, as such, the U.S. dollar is the world’s most dominant reserve currency, making up about 64% of all official foreign exchange reserves. The USD is so dominant, in fact, that more and more countries around the world are pegging their currencies to the dollar as illustrated in this video.

The uptake & dollar value of Bitcoin has grown rapidly over the past 3 months - almost doubling its value. For 33 indicators that prove the only way is up for Bitcoin, check out our infographic below.

For more than a year now, commodity prices have been under pressure from the strong U.S. dollar and slowing global demand. This has made a huge dent in the balance sheet of many net exporters of resources, in turn weakening their currencies. What most people don’t realize, however, is just how closely some currencies track certain commodities. Below are five world currencies that have been impacted by lower commodity prices.

The yuan will be added to the IMF’s basket of currencies used to value the SDR in October 2016, with a weighting on 10.92%, which effectively anoints the yuan (also called the renminbi) as a major reserve currency. What are the long-term implications of this? Read on.

Virtually everyone has become convinced that the dollar is going to 110, 120 or even 160. Folks when everyone is thinking the same thing … then no one is thinking. Here’s the thing. Almost no one is prepared for the dollar to drop. Everyone is convinced the dollar is going higher, and everyone is positioned long. Everyone is on the same side of the boat. When that happens invariably the boat tips over so here’s what I think is going to happen.

The next time you spend your cash, take a moment to reflect on the history of the bill or coin in your hand as depicted in today’s infographic illustrating 33 fascinating facts about U.S. currency (notes and coins).

Where will the dollar go from here? My answer: Though currency market volatility is likely to continue, I still see a stronger dollar over the longer term. Here's why: