The power of the dollar

1. {
Dollars
Advantages and
disadvantages
Dulgheru Andreea
Prichindel Patrick
8205
Coordinating
teacher: Mihai Daniel
Frumuselu

2. • Dollar (often represented by the dollar sign $) is the name of more
than 20 currencies, including those of Australia, Canada, Hong
Kong, Jamaica, Liberia, Namibia, New Zealand, Singapore, Taiwan,
and the United States.
• On April 2, 1792, the United States Congress created the
United States dollar as the country's standard unit of
money. The term dollar had already been in common
usage since the colonial period when it referred to eight-
real coin (Spanish dollar) used by the Spanish throughout
New Spain.
FACTS
• The term "dollar" has also been adopted by other countries for currencies
which do not share a common history with other dollars. Many of these
currencies adopted the name after moving from a £sd-based to a
decimalized monetary system. Examples include the Australian dollar, the
New Zealand dollar, the Jamaican dollar, the Cayman Islands dollar, the Fiji
dollar, the Namibian dollar, the Rhodesian dollar, the Zimbabwe dollar, and
the Solomon Islands dollar.

4. Travel
You'll feel the most direct correlation between a strong dollar and
your pocketbook if you travel internationally. A strong dollar
means everything you buy overseas will be cheaper. If the euro
drops 20 percent against the dollar over the course of a year, for
example, a wide swath of European countries, from Spain to
France to Germany, will be cheaper for you to visit. A hotel room
in Ireland that would have cost you $200 per night last year would
only cost you $160 per night this year. Dinner and a show in Paris
might only run you $200 instead of $250.
Of course, the reverse is true if you're working overseas or paid by
a foreign employer. For example, if you work for a German
manufacturing firm and are paid in euros, your paycheck will
effectively shrink by 20 percent when you spend that money back
in the United States.

5. Investments
When you invest in stocks, you're owning a piece of a company.
Stock prices typically rise and fall with the financial fate of the
underlying companies. If a company you invest in does significant
business overseas, its earnings are reduced because its products are
more expensive to foreign buyers. Companies also lose out when
they make sales in foreign currencies and have to convert that
money back into U.S. dollars. The result is a net reduction in actual
earnings. With reduced earnings often comes a falling stock price.
A rising dollar also hurts international investments, both in bonds
and in stocks. Generally, the best way to avoid the negative effects
of a higher dollar on a stock market investment is to look for
domestic companies with little international exposure.

6. THE POWER OF THE U.S DOLLAR
In essence, the dollar is like the gold standard. Most global contracts,
especially those for oil, are denominated in dollars. Many large economies,
such as China, Hong Kong, Malaysia, and Singapore, peg their currency to
the dollar. When the dollar weakens, so do the profits of their exporters.
These countries also hold large deposits of U.S. Treasurys. In theory, they
could sell their holdings and cause a dollar collapse. But that's not in their
best interest.
Why the Euro Won't Soon Replace the Dollar as a Global Currency
In 2007, former Federal Reserve Chairman Alan Greenspan said the euro
could replace the dollar as a world currency. At the end of 2006, 25 percent of
all foreign exchange reserves held by central banks were in euros, compared to
66 percent in dollars. Furthermore, 39 percent of cross-border transactions
were being done in euros, compared to 43 percent in dollars. In many areas of
the world, the euro is replacing the dollar. The euro's strength is because the
European Union has now become one of the world's largest economies.

7. Bibliography
• https://bizfluent.com/info-
8602872-advantages-
disadvantages-strong-dollar.html
• https://en.wikipedia.org/wiki/Doll
ar#History
• https://www.thebalance.com/pow
er-of-the-u-s-dollar-3306267