Since 1944 under the Brentwood Agreement, the U.S. dollar has been the reserve currency for the world. Having reserve currency status means the U.S. dollar would be the standard in international trade and business transactions. So, when an exporter in South Korea quotes a price for a distributor in France, both parties will use the U.S. dollar in their negotiation. Once the deal is complete, the distributor in France will most likely convert Euro dollars to U.S. dollars to pay the exporter in South Korea.
Trillions of dollars of transactions have taken place everyday around the world with the U.S. dollar being the desired currency for exchange. However, the decades of worldwide prestige and dominance may be on the decline for the U.S. dollar as its demand has weakened in the global markets.
The U.S. dollar in November 2000, was worth 1.1909 against the Euro dollar. As of September 2011, the U.S. dollar is only worth .7038 against the same Euro dollar. Most of the U.S. dollar decline comes from the strength of competing currencies, U.S. government debt and the ease of foreign currency exchange with online banking. Since very little hope is on the horizon to strengthen dollar stability and demand, further decline is likely to occur.