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Why we’re stuck with the U.S. dollar as reserve currency

The United States may be ungovernable but Thursday’s market action confirms that the greenback remains the world’s reserve currency and is still considered a safe haven.

Investors expecting a U.S. dollar rally in the wake of Congressional détente were surprised by a 1.3 per cent decline in the U.S. trade-weighted dollar index Thursday. Gold soared almost three per cent intraday and domestic materials stocks also shot higher – clear signs of a “risk on” market rally.