The U.S. dollar has begun to recover after weakening relative to other global currencies last year. But worries that the greenback might be in immediate danger of losing its primacy in the world economy were overblown even before this comeback.

In a highly connected world, we need a common language for commerce and science; English often (though not always) fills that role. In the same way, our global financial system needs a primary reserve currency as a sort of common financial language. Since roughly the middle of the 20th century, that has been the U.S. dollar.

The dollar is one of eight major reserve currencies. The International Monetary Fund recognizes it alongside the Australian dollar, the British pound sterling, the Canadian dollar, China’s yuan (also known as the renminbi), the euro, Japan’s yen and the Swiss franc. All of these are currencies that another country’s central bank or treasury may hold as part of its…

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