Why is the U.S Dollar so much stronger than a majority of other currency around the world?

Question

I have always wonder why its so much stronger ? when you go to Japan, everything is cheaper in a sense and the U.S dollar means more in Japan. Why is that ?

In: Economics

Answer 1

It’s a reserve currency. But why is it reserved?

Because every country on earth must trade with USA, and therefore must hold certain amount of dollars.

And since it’s a reserve currency, during times of uncertainty or economic downturn people will sell stocks and buy dollars.

Last, USA is the most innovative country on earth, which produces services and goods that everyone wants, thus increasing desire to trade and hence the need to hold dollars