The US dollar is the world's reserve currency. The dollar is the most widely held currency because of the political and economic stability of the United States. A reserve currency must be fully convertible to other foreign exchange instruments. The dollar floats freely, and the value of the greenback is a function of interest rate differentials and sentiment. Governments intervene in foreign exchange markets from time to time to maintain stability. Historical volatility in the world's leading currencies tends to be lower than stocks, bonds, commodities, or other assets.
The dollar index reflects the overall