Why is the US dollar considered to be the strongest cuurency?

Question

.. aside from the fact that is it accepted in most countires. I ask because in terms of conversion rates. I get far more for my pound than I would for the dollar if I go abroad!!
I mean.. think about it a dollar millionaire wouldn't even be a millionaire in the UK

sorry misspelt currency!

Answer 1

I thought that the pound was considered the strongest currency?

Answer 2

"Strong" is only a relative term, and only make sense in discussing recent changes in the currency. The US Dollar is far more important and widely used than the Pound or the Euro, as it is the closest thing to a universal currency on Earth. That's an entirely different issue than recent exchange rates, which are affected by a lot of things, but always boil down to supply and demand for the various currencies.

You shouldn't get hung up over the fact that a Pound buys you more or that one pound = almost 2 dollars. That's nothing but a historical accident. There is no reason to expect currencies of different countries to be equal, any more than you expect a hamburger to cost the same as a banana. The Pound has always been worth more than the dollar; the dollar has always been worth more than the Yen. But that says nothing about the different countries or their economies.

The dollar & pound currencies have different historical origins and have never been equal units. There is no reason to expect them to be. A century ago a pound was worth $4, now it's only worth $2.

Answer 3

The definition of "strong" when referring to currency means that it is worth more relative to other currencies. Not in terms of exchange rates but in terms of purchasing power. Example: If something cost $100 USD in the U.S., and the same item cost $100 CAD in Canada, and my $1.00 USD was worth $1.10 CAD, then the real cost of the good in Canada would be less than the cost of the good in the U.S. to a U.S. citizen, but the opposite would be true for a Canadian citizen. Historically the dollar has been strong, though now it is considered relatively weak because the exchange rates have been changing and a USD won't buy as much of other currency as it used to. The "strength" of a currency isn't based solely on exchange rates, it's based on exchange rates between currencies AND price levels in their respective countries.

So I guess my points were that 1) the USD isn't the strongest currency, and 2) currency strength isn't just about exchange rates.

Answer 4

I don't think it is considered the strongest currency. The British currency is the strongest in the world, don't quote me though!. I think a dollar is worth around 50 or 60p. We have too strong a currency. It stops European business from coming here.

Answer 5

USD is the strongest currency in terms of money circulation. But not strongest in exchange rate/value

Answer 6

At the moment, it's a very weak currency.

Answer 7

I think you answered your own question the pound is almost always stronger than the dollar by nearly double at the moment so it isnt!

Answer 8

It is surely because of the stable economy. The US economy is string and stable, so people use that as a factor when they compare currencies.

Answer 9

Who said it was the strongest currancy?? The Euro is far stronger and is used by as many.

Answer 10

It is because it is accepted almost anywhere except like antartica.