The U.S. Dollar Maintains its Dominance in Global Finance

Data on currency use in international trade and finance is sparser and comes with longer lags than trade figures. Even so, we are so far not seeing a significant impact. Despite increased geopolitical risks, the latest data show that the U.S. dollar remains dominant. According to SWIFT, it accounts for over 80 percent of trade finance, likely because much of commodity trade continues to be invoiced and settled in dollars.

It also accounts for nearly 60 percent of FX reserves despite the gradual diversification of FX reserves away from the dollar and partly into non-traditional reserve currencies such as the Australian dollar, and the Canadian dollar.

See our full article on geopolitics and its impact on global trade and the dollar here.