The US dollar is the world’s reserve currency, meaning that most meaningful financial transactions are conducted in US dollars. If French or German companies want to purchase oil from Saudi Arabia, they can’t do so using Euros. They have to take those Euros and convert them to US dollars in order to pay the Saudis for their oil. This system worked really well for decades because the US dollar was a solid currency backed by a government whose monetary policies ensured the dollar’s strong economic performance on the world stage.
