So what are the Two Major Reserve Currencies in the World?

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The term reserve currencies denote types of national or regional currencies, that are used widely around the world in facilitating most trade and financial transactions.
Reserve currencies are also known as Fiat currencies. A currency is chosen to become a reserve currency because of its reliable and high value as well as its stability. These types of currencies are stored in the central bank and government reserves for use in high-level trade and financial transactions. The United States dollar has been the major reserve global currency since the creation of the 1944 Bretton Woods Treaty.
However, the USD is not the only reserve currency. But there are other currencies such as the Euro and the Australian dollar that are held in large amounts all over the world by governments. These reserve holdings of currency are used in about 40% of all business and government trade activities. Read on to get a glimpse of the two major reserve currencies in the world today.

The US Dollar

The US dollar whose symbol is $ with USD code is the official currency for, the United States of America. The USD is used in America as well as other parts of its insular territories. Virtually all trade and business transactions around the globe are conducted using US dollars. The use of this currency is often preferred because the nation was the first among most major world nations to have a centralized banking system, which was started in the 1900s.

The process of centralization of the banking system halted the printing of various currencies by different banks. The USD has always been appreciating due to the nation’s favorable economic development and stable growth. The present-day exchange rate stands at 1 USD for approximately £0.65. The circulating money comes in Federal Reserve notes of $1, $5, $20, and $100. Apart from being used as a reserve currency, some nations still use the USD as their official currency and some of the nations also use it as a de facto currency.

The Euro

The Euro, which is also a global reserve currency, is a regional currency used in various European nations. The Euro has a currency code denoted as follows – EUR and the following sign €.The region using this currency consists of 19 nations, which include Finland, the United Kingdom, Austria, Estonia, Belgium, Greece, Germany, France, Spain, and Portugal – among others. Also, 201 million people all over the globe use other currencies that are pegged to the Euro. This currency is the second most used reserve or fiat currency in the world as well as the 2nd most traded after the USD. As of 2014, there were approximately €995,000,000,000 in circulation, and the currency has the highest combined coins and bank notes value in circulation globally.

This level of circulation surpasses the USD and it implies that the Euro may be rising in popularity as a reserve currency even though the UK seeks to withdraw from the Eurozone. The currency is backed by a strong regional economy consisting of stable European nations with strong economies and it is thus expected to remain stable.

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The Two Major Reserve Currencies in the World

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