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Land of the free. Home of the brave. Fight back against high banks fees and margins by using OFX for your international transfers.
Currency Profile
The U.S. dollar (USD) or ‘greenback’ is the world’s primary reserve currency and accounts for a whopping 85% of all foreign exchange (forex) trading. That’s an average of $4.5 trillion U.S dollars being traded every day. With those kinds of numbers, it’s not hard to see why announcements from the Federal Reserve (the Fed) send ripples across the globe:
According to the Fed, “Economic developments in the United States, including U.S. monetary policy actions, have significant effects on growth and inflation in foreign economies.”
As of 2016, the USD to EUR currency pair is one of the most active trades in the forex market. One of the reasons the USD/EUR pair is so popular is because the eurozone (all the countries using the euro) ranks as the world’s second largest economy just behind the U.S.
Dollarization: The Dollar Travels Well Beyond National Borders
In a process called ‘dollarization’, the U.S. dollar has become the unofficial or semi-official currency of more than a dozen nations including Ecuador, Cambodia, Lebanon, Panama, Afghanistan and Zimbabwe amongst others. When a country begins to experience severe economic uncertainty, the U.S. dollar may quickly become a de facto currency.
Active Trading
As the dominant world currency, the U.S. dollar plays a pivotal role in trade markets in part because most commodities are priced in USD including oil, gold and agricultural goods like wheat. Amongst other factors, the trade balance (the number of imports relative to exports) may affect the strength of the U.S. dollar relative to other currencies. The U.S. remains the world’s largest importer, which can contribute to trade deficits, but we do also export over 450 products with a strong comparative advantage (which means our products compete better on a global scale than would be expected based on the size of the export market.)1
In addition to USD/EUR trading, the other top six trades by volume are: USD/JPY, USD/GBP, USD/AUD, USD/CAD and USD/CHF. 2
At OFX, we know you earned your money through hard work and careful planning. That’s why we keep our international wire fees low, so you get a fair deal. Banks often charge up to 5% margins on your foreign exchange transfer, plus fees. At OFX, our margins are low--often less than 1% and our fees are minimal. If you’re tired of banks being banks, register with OFX, and build your own bottom line--not your bank’s.
Currency Name: US dollar. Also known as: bucks, benjamins, bones.
Currency Code: USD
Currency Symbol: $
Central Bank: The Federal Reserve
Countries Used In: U.S.A, Ecuador, East Timor, El Salvador, Marshall Islands, Micronesia, Palau, Turks and Caicos, British Virgin Islands, Zimbabwe
Major Unit: One dollar
Minor Unit: One cent or penny
Note Denominations: 1, 2 (rare), 5, 10, 20, 50, 100
Coin Denominations: Penny (1¢), nickel (5¢), dime (10¢), quarter (25¢), half dollar (50¢), one dollar.
