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Old 01-29-2007, 12:09 PM
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Join Date: Jan 2007
Posts: 22
Default king dollar

is it true tat dollar prices are dependent on oil prices? and why do most of them accept currency in dollars? why dollar is so special?
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Old 01-30-2007, 08:23 AM
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Join Date: Dec 2006
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Default

The USD is not specifically dependent on oil prices. That is just one in very many things that influence the value of the dollar. The bigger ones are interest rates and trade flows.

The reason the oil producers "accept dollars" is simply that global oil prices are denominated in them. I'm sure there are transactions done in other currencies, but it all ties back to the market price for oil, which means a USD relationship.

I have no idea what the history of that is, though. Probably a post-World War II thing when oil production was really ramped up globally. In generally terms, that's probably when the USD became the dominant one in the world. Before that it had been the GBP, I believe.
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