Is the Dollar Losing Its Luster? Coronavirus Proved Forecasters Wrong.

This video explores the role of the U.S. dollar in the international monetary
system and the prospects for its future role in the global economy. Since 1944, the U.S.
dollar has been the most important currency in the world, the currency of choice for
foreign transaction, a less risky option for investments, and a safe haven during times of
crisis. Indeed, despite frequent predictions that it will soon lose its luster as the world’s
most important currency, at least for now, the world seems to have little interest in
finding an alternative. While China has made huge inroads into the global economy, the
ongoing coronavirus pandemic and accompanying demand for U.S. dollars suggests that
the U.S. currency is retaining its position as the dominant currency in the global monetary
system.

Discussion Questions:

1. More than 60 percent of the world’s reserve currency holdings are in U.S. dollars and
   some 90 percent of all global exchange trading involves the U.S. dollar. Reflect on the
   importance of the U.S. dollar to the global economy. Can the U.S. dollar remain the
   preferred global reserve currency? Is there an incentive for countries to move away from
   the U.S. dollar? Explain.
2. Consider the implications of the growing presence and power of China in the global
   economy. What does it mean for the United States and the U.S. dollar? Will there be a
   time when China’s currency, the yuan, equals or exceeds the U.S. dollar’s value in the
   global economy? How might the issue of trust impact the process?
3. Discuss the role of the United States as a safe haven location during times of global
   uncertainty. How did the country achieve that reputation, and can it maintain it if the
   United States continues on its current isolationist trajectory?

Source: WSJ: Many Predicted the Dollar’s Demise. Coronavirus Proved Them Wrong