Eli5: Why is the U.S. Dollar so powerful?
In: 208
Oil.
from: https://www.investopedia.com/articles/forex/092415/oil-currencies-understanding-their-correlation.asp
Oil Quoted in Dollars
Crude oil is quoted in U.S. dollars (USD). Countries that import oil pay for it in the greenback. Similarly, those that export the commodity receive payment in USD. This system dates back to the early 1970s after the collapse of the Bretton Woods gold standard. This period saw the rise of the petrodollar system, which promoted the U.S. dollar’s rise as the world’s reserve currency. Oil producers and purchasers use this system to trade in the commodity in U.S. dollars.
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