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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Seeker of Truth who wrote (5362)	4/6/2006 12:14:31 PM
From: energyplay	Respond to of 219162

The reason you would want central banks and others to hold USD is currency exchange rates may change. If you can buy a USD for 1.15 CDN in March, and the same USD could cost 1.25 CDN in May, it makes sense to hold USD for the bills that show up every month that are denominated in USD, like oil. Your central bank may also want USD so they cna stablize their own foreign currency. In the last Asian crisis, the Korean won dropped very fast. History is possibly a larger influence, the USD was the foundation of Bretton Woods, and was built into this position of primacy.