US Dollar (USD)

As you probably already know, the American dollar is the leading currency in the world in most areas. In fact, the dollar is the single currency that gets traded the most on the forex exchange market and it is one of the strongest currencies both in influence and actual monetary value. The classic green bills are also the most recognizable form of money on this planet and the American dollar bill is often used to represent money in general.

Abbreviations

By being such a popular and well-known currency the dollar has earned a lot of different nicknames over the years. There are way too many to mention them all here. However, just like all other currencies the dollar also has official and unofficial abbreviations as well as trading codes. ’US dollar’ and ’dollar’ are the most common ways of writing and speaking about the currency.

The official international code (ISO-4217) for the American currency is USD and like other big international currencies such as the Euro and the Sterling Pound, the dollar has its own sign: $. The dollar sign is without a doubt the most iconic currency sign there has ever been and it is often used to represent money in similar ways as the classic green dollar bills.

Denominations

Most currencies that are used in today’s society exist as both coins and bills. One dollar can be divided into 100 cents and all coins and bills that circulate right now have one of the American presidents printed on them. The only exceptions being the 100 dollar bill with Benjamin Franklin, the 1 dollar coin with Sacajawea, and the 10 dollar bill with Alexander Hamilton. In the section below you will find a list with all the denominations, their nicknames, and what person is printed on it.

Coins

  • 1 cent – is made from copper, is usually called a penny, and has Abraham Lincoln printed on it. Lincoln was a president in the US and an influential leader during the American civil war.
  • 5 cent – is silver coated, is called a nickel, and has the third president Thomas Jefferson printed on it.
  • 10 cent – is a silver coated coin called a dime. It has Franklin D. Roosevelt, the country’s 32nd President and the leader during World War II printed on it.
  • 25 cent – is a silver coated coin that’s usually called a quarter. It has the first president of the United States, George Washington, printed on it.
  • 50 cent – is also coated in silver, called a half dollar, and is extremely rare. The coin is printed with president John F. Kennedy who was killed in 1963.
  • 1 dollar – is the only gold coated coin in the US and the only coin without a president on it. Sacajawea was a famous Native American who participated in Lewis and Clark’s nationwide expeditions.

Bills

  • 1 dollar – has George Washington, the first president of the United States, printed on it just like the 25 cent coin.
  • 2 dollar – is extremely rare and comes with Thomas Jefferson printed on it.
  • 5 dollar – has Abraham Lincoln printed on it.
  • 10 dollar – has Alexander Hamilton who was one of the founding fathers of the United States.
  • 20 dollar – is printed with Andrew Jackson on the front. Jackson was the 7th president in the US.
  • 50 dollar – is a somewhat of a rare bill with President Ulysses S. Grant.
  • 100 dollar – is the highest denomination and it has Benjamin Franklin printed on it. Franklin was one of the founding fathers who participated in writing the Declaration of Independence. He is also known for inventing the lightning rod and the American postal system.

Other dollars

Sometimes calling the American dollar a dollar can get confusing because USD is not the only currency in the world called a dollar. The word dollar originates from the German word “thaler” which has been the name of several European currencies during the last few centuries.

The list of countries using a dollar currency is long. Some of the most well-known dollars that you’ve probably heard of before are the Canadian dollar, Australian dollar, Hong Kong dollar, New Zealand dollar, and Singapore dollar. Note that these currencies aren’t sharing anything but their name and should therefore not be confused with one another.

History of the United States Dollar

A nationwide American currency was first issued in July 1785 by the Continental Congress of the United States. In 1792 the United States Congress officially created the currency that still acts as thebackbone for the dollar that’s still used today. It was George Washington that ordered the new currency and it was delivered in the shape of the United State’s first silver coins, half dimes.

The new coins were worth their own value in weight and the currency was therefore completely reliant on the price of silver. A so called silver standard currency.

The design and price system for the new American dollar was based on the Spanish dollar that had been used in all of North and South America up until that point. During a long period of time, the Spanish dollar and the American dollar coexisted as accepted methods of payment in North America.

The American Dollar Today

The United States dollar is one of the most important and influential currencies in the world and the dollar rate today can have a huge impact on the rest of the world. By being the world’s leading economy the United States naturally has one of the strongest and most stable currencies there is. It is also the first reserve currency meaning that it’s used for international transactions and that the today dollar rate acts as insurance for other countries money.

For many years the US dollar has been used to support and stabilize other currencies in times of need. Several countries in the world that are considered too small to have their own currency (mostly the Caribbean Islands) are currently using the USD as money. Below is a list with some of the countries using the dollar today:

List of countries that use USD

  • East Timor
  • El Salvador
  • Panama
  • The Marshall Islands
  • Cambodia
  • Pulau
  • Zimbabwe

 

As we mentioned earlier, the US dollar is the single currency with the biggest daily turnover on the international foreign currency exchange market (forex market). And that’s how it’s been for the last 20+ years except for a short period in 2002 when the Euro surpassed the dollar as the world’s most traded currency.

The main reason to why the USD is leading in this category is because of the US dollars stable and predictable nature. But also because most of the world’s currencies already have a relationship with the American dollar. In fact, the dollar is traded with most of the world’s other currencies on a regular basis.

The forex market is by far the biggest market in the world due to the fact that most nations central banks constantly trade currencies for millions of dollars in order to control their own currency. In most cases, it is the dollar exchange rate that central banks are focusing their trades on.

Because the dollar is traded in such vast numbers the list with important currency pairs based on the dollar rate is long. Instead of mentioning them all we choose to focus on the most popular ones.

USD/EUR – The relationship between the dollar exchange rate and the euro exchange rate is very important to all of us. There is no currency in the world that’s not directly connected to one of these two currencies in one way or another. It is also the single most traded currency pair on the forex market.

USD/JPY – The American dollar and Japanese Yen are the second most traded currency pair in the world. This combination comes quite naturally due to the Japanese influence on the Asian market and the dollars rate position in the world economy.

USD/GBP – The British Sterling Pound and the US dollar have had a closely knitted relationship since the dollar was created. It is very popular to invest money in the US dollar rate and the pound rate together, both on the forex market.