Dollar
The US dollar, the world primary reserve currency and the most traded currency in forex.
Quick answer
The dollar is the US currency and the most traded currency in the world.
Definition
The dollar is the US currency and the anchor of the forex market. It sits on one side of most global currency trades and is held as a reserve by central banks worldwide. Its value is driven by Federal Reserve policy, US interest rates and its status as a safe haven in stress.
How It Works
- It is on one side of most forex trades
- It is the global reserve currency
- Fed policy and US rates drive its value
Trading Tips
1
Watch the dollar index for a broad read
2
Read the dollar against the pair you trade
3
Expect it to strengthen in risk-off episodes
Related Terms
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