USD Dominance in Global Finance Holds Steady Despite China Unwinding
• USD share in international transactions hit a decade high in 2023, while foreign holdings of US bonds held steady • USD remained the favored currency in international transactions; global demand for US bonds stayed steady • USD likely to remain the currency of choice or haven asset during economic stress • China, Hong Kong, and Japan's holdings of US Treasuries dropped in 2023, but demand from rest of world held up • Continued unwinding of China’s Treasury holdings fueled de-dollarization narrative, but data doesn't fully support it