Why are the values of world currencies always compared to the US Dollar?
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No expert here but I think in part because of its dominant role as a medium of exchange, the U.S. dollar is also the dominant currency in international banking.
Additionally, the relative strength of the U.S. economy supports the value of the dollar. It’s the reason the dollar is the most powerful currency. As of the end of 2020, the U.S. had $2.04 trillion in circulation. As much as half that value is estimated to be in circulation abroad.
It is not. The value of world currencies are displayed in USD to American audience and GBP to British audience, etc. Whenever the currency values are displayed to an international audience there are a number of currency indexes which can be used. Most known is the US Dollar Index (Dixie) which notably does not include the USD itself but five other currencies.
The US dollar is the global reserve currencies. Something on the order of 70-80% of transactions that cross national borders involve dollars (with the overwhelming majority of the remainder being Euros within the Eurozone, which is arguably not a “true” national border from an economic perspective).
The dollar enjoys this supremacy entirely because of the absolutely obscene size of the US economy, and there point-blank is no country or region that can offer an alternative; they’re all either deeply flawed (e.g. China, Europe), or they’re too small to liquidate the entire economy (e.g. Britain, Canada, Australia), or both (Japan). There is also not going to be an alternative for the better part of the century.
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