The US dollar remains the world’s most accepted currency despite the growing acceptance of the euro - since its inception in 1999 - and encroachment on the dollar’s share in certain markets.
 

The AAA long-term issuer credit rating on the US rests on this position of the dollar as a key international currency.

Without this, the US would not have such ready access to external financing; interest rates would have to rise to attract higher domestic savings; and growth would slow well below potential.

The dollar did not attain this position by accident, nor does the US maintain it simply with inertia. This dominance is based on the US economy’s fundamental strength - the casualty does not run in the other direction.

That strength comes from the economy’s size, the flexibility of labour and product markets, and the prospect for higher productivity growth and favourable investment returns over the medium term.