It’s hard to beat US$ because it has maintained dominance for many years across all four markets. There are four major markets where the U.S. dollar has consistently dominated in trading, and other currencies are not widely utilized in these significant markets
1. Equity Market
2. Debt Market
3. Commodity Market
4. Money Market
1). Equity Market, US$ has been dominating for years and market cap of 2023: NYSE at US$27.69T & Nasdaq at US$24.56T. Monthly trade volume US$1.4 T and US$1.2 T for NYSE and Nasdaq, respectively. Shanghai stood at US$8.5T and monthly trading volume stood at US$0.5T (https://lnkd.in/eBYqP-UM)
2). Debt Market, US$ currency is the most widely traded currency and it stood at US$615 T & the second is EUR stood at EUR443T. China Yuan stood at No. 6 of RMB9.3T (https://lnkd.in/e3yYG9XA)
3). Commodity Market, the two major commodity trading hubs are situated in the United States and the United Kingdom. Crude oil, the largest traded commodity globally, has its benchmark price quoted in U.S. dollars. In 2022, crude oil volume stood at US$2T. (https://lnkd.in/gpN8VYDt)
4). Money Market, asset under management denominated in US$ stood at US$9 T in 2021 (https://lnkd.in/esVTCCwv)).)
The rationale behind the difficulty for other currencies to surpass the U.S. dollar is that they are not dominant in the big four markets. These major markets represent significant places where transactions involve substantial spending and receipt of money. The U.S. dollar's prevalence in these key markets contributes to its continued dominance.
So, for the time being, I believe that US$ still dominates in the future, unless there are other currencies that successfully penetrate the big four markets.
#equitymarkets #debtmarkets #commoditymarkets #moneymarkets #bankingandfinance #economy
https://www.aljazeera.com/features/2023/8/24/can-brics-dethrone-the-us-dollar-itll-be-an-uphill-climb-experts-say