The Dollar’s Exceptional, Like It or Not
The greenback tends to fluctuate on the basis of economic projections, but its role in the global economy remains impregnable.
King for more than a day.
Photographer: Al Drago/BloombergIt’s again fashionable to be down on the dollar. After a great run the past few years, the prevailing sentiment is now one of anxiety. Not just about the greenback's short-term prospects, which have always tended to ebb and flow with projections for economic growth, but about the durability of the unique role it has played in world commerce since at least 1945.
You can hold the obituaries, plenty of which have been drafted and all but retracted over the decades. The dollar is integral to global finance — it is involved in almost 90% of all transactions in the $7.5-trillion-a-day market for foreign exchange. The longevity of its dominance depends not just on sentiment toward the occupant of the White House at any one point in time, but whether a viable alternative comes along that offers all of the advantages of American capital markets and displays few disadvantages of its own. China’s yuan isn't remotely there yet.