Global trade to shift away from U.S. dollar as invoicing currency
The choice of currency used for trade impacts how economic policies affect countries globally. A model was created to understand why firms choose certain currencies for invoicing, considering factors like exchange rate risk and cost hedging. The study used real-world data from multiple countries and currencies to show that currency movements influence invoicing decisions. As the U.S. economy's global share decreases, other currencies are likely to become more popular for international trade invoicing.