Is The Status Of The US Dollar Under Threat?

Can the US dollar maintain its position as the reserve currency given the state of the US economy?

A reserve currency is one that is commonly held in significant quantities by foreign governments and institutions as part of their accumulated foreign exchange reserves. The dominant reserve currency also tends to be the pricing currency for products traded on a global market.

History of the reserve currency

A currency may remain the de facto reserve currency for years – if not decades. But history has shown that every now and again it loses its status and is replaced with an alternative currency. For instance, in the 18th and 19th centuries, sterling was the key reserve currency. However, when the UK accumulated significant debt following both world wars, the reserve currency mantle shifted to the US dollar.