The United States dollar has an illustrious track record. The impact of the United States dollar in global macro-economics and worldwide politics is indisputable in spite of the global economic downturn over the last few years. The US dollar is a tried-and-tested currency of preference in international commerce and transcontinental trade since the dawn of the exclusive monetized currency.
The colorful history of the US dollar goes further back than the first established uniform paper currencies of the world (Norway and Denmark in the 1820s) for it actually had its humble beginnings from the first government-issued paper money in the western world dating back to 1690 in colonial Massachusetts.
Prior to its inaugural circulation in 1860 by the federal government and upon the founding of the sovereign nation, the individual states (erstwhile colonies) issued their own money that consisted of a wide dizzying array of notes and denominations. As the national currency of the United States of America, the US dollar today comes in either paper currency in different kinds of notes or hard currency (i.e. coins) in a variety of denominations.
US coins in popular circulation include the cent (1¢), nickel (5¢), dime (10¢), and quarter (25¢), while the half dollar (50¢) and one dollar ($1) coins are rarely used. On the other hand, US paper money in wider circulation include the $1, $5, $10, $20, $50 and $100 bill (collectively monikered ‘Benjamins’).
Monetized banknotes of higher value (i.e. $500, $1,000, $5,000, $10,000 and $100,000) are considered collectors’ items. The $2 note that features former US President Abraham Lincoln is rare. Typically denoted by the standard green color for which the paper currency is widely recognized, the greenback proudly features images of the US founding fathers or former United States presidents.
The United States dollar could still give the rest of the most commanding world currencies today a run for their money. With year-end averages of the Euro at €1.33, Pound sterling at £0.64, Canadian dollar at $1.0042, and Mexican peso at $12.39 in 2010 against the USD, it is projected to maintain a competitive advantage against currencies of their closest trading partners this year. The US dollar still holds on to the unique distinction of being the bench mark unit of currency in international commerce for valuable commodities such as petroleum and gold. Although its value in the international exchange market has been moderately fluctuating in the last few years, the US dollar is still the world’s primary international reserve currency, accounting for more than twice the volume of Euro deposits in central banks and private holdings around the world.