The Almighty Dollar Faces Growing Threats, But Still Reigns Supreme in Global Finance

The US dollar serves an important role in the global economy, including being used to price oil and other commodities. A strong dollar policy has ripple effects.

Americans benefit from owning the world's reserve currency, including some protection from economic risks. The US has also used the dollar as a "weapon" in sanctions and tracking terrorist funding.

Three main threats could challenge the dollar partisan divisions and fiscal "chicken" in the US; increased weaponization leading to de-dollarization momentum overseas; global economic fragmentation.

Incumbent advantages help the dollar, including the huge size of the US economy and how entrenched the dollar is in the global financial system. It would be very difficult to fully replace.

While the dollar falling is unlikely anytime soon, factors like unilateral sanctions and finding alternatives mean faith in the dollar may be on shakier ground.