The official currency of the United States and its territories is the United States Dollar (USD). The Coinage Act of 1792 established the USD as the nation’s standard currency. The symbol for the USD is $, and it is widely used in international transactions as one of the world’s dominant reserve currencies. The USD also serves as a standard currency unit for commodities markets worldwide, including oil and gold, playing a crucial role in global finance and trade.
The Smithsonian Agreement
In December 1971, the Smithsonian Agreement created a new dollar standard. The currencies of several industrialized states were pegged to the USD, allowed to fluctuate by 2.25% against it. The Group of Ten (G-10) states raised the price of gold to $38 per ounce, an 8.5% increase over the previous price. This adjustment devalued the USD by 7.9%. Despite President Nixon’s endorsement, the agreement failed to enforce financial discipline by the Federal Reserve or the US government.
Global Reserve Currency
The USD is a leading global reserve currency, held by central banks and financial institutions worldwide. Its dominance in international trade and finance ensures stability in global markets. The USD’s role in commodities markets, such as oil and gold, further solidifies its importance in the global economy.
Additional Acronyms for USD
- USD - Universal Scene Description
