The dollar is the world's reserve currency. The US greenback is the foreign exchange instrument of choice for central banks, monetary authorities, governments, and supranational institutions when it comes to their reserves. While the euro, Japanese yen, and gold are also assets governments hold, the dollar has long held the position as the foreign exchange asset of choice.
The dollar index is not far below its recent high, even though the US central bank took the step of reducing the short-term Fed Funds rate by 25 basis points at its July meeting. Even an accelerated