Commerzbank’s Head of FX and Commodity Research said the US Dollar (USD) remains the main currency for global trade and reserves, despite Iran’s Renminbi toll plans and wider geopolitical tensions. The USD is widely used not only in trade with the United States, but also in trade between other countries.
She said the USD’s share in international payment systems is higher than the United States’ share of global trade. This points to the Dollar’s role as a common vehicle currency in cross-border transactions.
Dollar Dominance In Trade And Payments
She noted a slow decline in the Dollar’s share of global foreign exchange reserves, from around 70% in 2000 to just under 60% recently. She also referred to greater use of non-traditional currencies.
She said these shifts are mainly linked to sanctions and other political actions, rather than economic reasons. Without sanctions, she said there would be little incentive to move away from the USD, as many users still trade in it.
We see the US dollar’s structural dominance as the key factor for the weeks ahead, meaning it is not the time to position for a significant decline. Recent SWIFT data for March 2026 shows the dollar was used in over 47% of global payments, a figure that continues to vastly exceed the US share of world trade. This powerful network effect should provide a strong floor for the currency.
The gradual erosion in the dollar’s reserve status is a known, long-term trend that should not dictate short-term trading strategies. The latest IMF data for Q1 2026 pegs the dollar’s share of global reserves at 57.9%, down only slightly from the 58.8% we observed in early 2025. This slow drip is driven primarily by politically motivated actions from a small group of countries, not a broad economic rejection of the dollar.
Implications For Traders And Volatility
For derivative traders, this environment suggests focusing on volatility rather than a sustained directional bet against the dollar. Geopolitical headlines, like the recent talk of new local currency trade deals, are likely to cause temporary dips that have historically proven to be buying opportunities. Options strategies that benefit from short-term price swings in major pairs like EUR/USD could be more effective than outright short positions on the dollar.
We are also seeing growing liquidity in derivatives linked to currencies benefiting from this political shift, especially the offshore Chinese Renminbi (CNH). For instance, volumes in CNH futures and options have climbed steadily since the expansion of sanctions we witnessed in 2025. This reflects a tactical move by specific actors, not a fundamental challenge to the dollar’s efficient, deep, and still-unmatched system.
