Study published by N.Y. Fed on June 21, 2022, looked into the dominance of the U.S. dollar and other currencies in the global economy
One factor that could threaten the dollar's dominance is globalization or localization of product chains, like what we saw during the pandemic shock
USD invoicing could be supported if economies rely more on global supply chains, this would be reflected in cross-border foreign direct investment
The study found that larger companies tend to choose the currency pricing of exports. Also, larger exporters use dollars. Smaller exports tend to use euros to price their EX-EU exports. The study also showed that firms that rely more on imported inputs, invoiced in dollars, are more likely to price exports in USD. Meanwhile, larger firms tend to adopt the destination currency
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