Seeing as the USD is the most widely used and the most notorious currency in the foreign exchange market, you might find it useful to know a little bit about the currency and how it all began.
The word “Dollar” finds its origins in the German word “thaler”, though today the USD is known largely as the buck or the greenback. The dollar became the official currency of the United States of America in the 1792 coinage act along with a $10 coin named the “eagle”, which was discontinued at the start of the 20th century. Unlike today, back then the larger dollar denominations were actually represented by coins, while the cent denominations were represented by paper bank notes.
The value of the dollar, which was relatively stable during the first century since its inception, plummeted since 1975 when it was detached from the silver and gold standards, making it a free currency. Estimates show that the dollar of the 19th century had approximately 25 the buying power of the dollar in 2006, but as they say – the greater they are the harder they fall.
The dollar today is still the most widely kept reserve currency, although it’s fairing in the forex market during the past year and a half leaves much to be desired. The USD is still today yet to recover from its major downfall that began in late 2007 along with the global financial crisis. Recently, its price rates have seen improvements against some of the major currencies, but the way up is still long and steep for the US dollar.
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