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United States Dollars (USD) is the official currency of the United States of America. It is widely recognized as one of the world’s primary reserve currencies and is used for international trade and financial transactions.
The United States Dollar is abbreviated as “$” or “USD” and is further divided into smaller units called cents, each consisting of 100 cents. The symbol for cents is “¢.” The United States uses coins and banknotes as physical forms of currency.
Coins: There are six denominations of coins in circulation: 1 cent (penny), 5 cents (nickel), 10 cents (dime), 25 cents (quarter), 50 cents (half-dollar), and 1 dollar (Sacagawea golden dollar). While the half-dollar and golden-dollar coins are not as commonly used in everyday transactions, the others are widely circulated.
Banknotes: United States banknotes are commonly called “bills” or “greenbacks” due to their predominant green color. The denominations of U.S. banknotes currently in circulation are $1, $2, $5, $10, $20, $50, and $100. Each denomination features a portrait of a notable figure from U.S. history on the front and various symbols, buildings, and phrases representing American values and heritage on the back.
U.S. banknotes’ design and security features have evolved over time to deter counterfeiting. Modern bills incorporate intricate printing techniques, watermarks, security threads, and color-shifting inks, which make them difficult to replicate.
The Federal Reserve System, commonly referred to as the Fed, is the central bank of the United States. It plays a crucial role in managing the nation’s monetary policy, including issuing and distributing U.S. currency. The Federal Reserve collaborates with the U.S. Department of the Treasury, which oversees the production and circulation of coins and banknotes.
The exchange rate of the United States Dollar can fluctuate against other currencies due to various economic factors, such as supply and demand, interest rates, inflation, and geopolitical events. The exchange rate determines how much one currency is worth in terms of another. The value of the U.S. Dollar relative to other currencies is often tracked using exchange rate indexes, such as the U.S. Dollar Index (USDX), which measures its performance against a basket of major currencies.