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14 September, 12:21

Why is a majority of FX trading involved with the US dollar?

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  1. 14 September, 12:44
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    US dollar was decided as the world reserve currency under the Bretton wood's agreement. Previously the pounds was used as reserve currency by many other countries preferred US to lend them money which increased the demand for dollars.

    Previously world currencies were linked with gold where many countries were at disadvantage to reduce this it was equated to US dollars. So the central banks fixed the exchange rates between their currencies and US dollars. This made most of the FX trading in US dollars.
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