How to stop US Dollar’s Free Fall?

In international market the only currency that is used during the trade is the United States dollars. It has been the only currency to trade since the mid 20th century. According to a survey the 40-60 % of US dollar trade that is done across the border is denominated in the United States dollars. For decades it has been the only world currency and during the late 90s it was accounted to be the 2/3rd of the world’s total foreign exchange reserve.

The major currency in world today is pegged against the Unites States dollar while some countries link Ecuador and El Salvador have completely removed their currency in favor of United States  dollar. Now, being in such a dominant position in world economy a certain drop in dollar sends a shiver across the global economy. A slight change in the price of dollar against any other currency or commodities brings in huge effect all around the world. For many decades the price of dollar was almost controlled by the US federal reserves but for last few months or say in recent times dollar has seen a steady downfall in its price across all major currencies.

Some countries have seen almost 10-15% decrease in their price against dollar. The growing fear of US - Iran conflict, and the uncertain OPEC decision of oil supply cuts have send some panic in oil market which is turn have started to show on US dollar prices.  The major oil supplier like Iran already warned to change the denomination of trading oil from dollar to Euro which has more affected the demand of dollar as many countries have started to invest their dollar in other projects or change it with stronger currencies. This sudden decrease in demand for dollar has highly reduced its value in foreign exchange market.

One of the single most important factor of United States foreign policy to have the US dollar as world currency is looming dark to its sudden decreases in supply. If the condition worsens more then the dollar price is speculated to decrease more against other currencies which can send a shivering chill in people who have heavily invested in dollars. The only way to stop the devaluation of dollar is through tightening interest rates in US and holding a cap on US economy