CFA Investment Practice Exam 2025 – Comprehensive Preparation Guide

If the US dollar were not a reserve currency, the competitive position of US exporters would likely become stronger. This is because the status of the dollar as a reserve currency typically leads to higher demand for the dollar, which can result in its appreciation relative to other currencies.

If the dollar loses its reserve status, its value is likely to decrease, making US goods and services cheaper for foreign buyers. As the dollar becomes weaker, it enhances the price competitiveness of US exports in international markets. Foreign customers would find US products more affordable, potentially increasing their purchases and improving the sales volume for US exporters.

In addition, a weaker dollar can lead to a more favorable balance of trade for the US, as imports become more expensive for domestic consumers, pushing them toward relatively cheaper domestic goods. Thus, this scenario presents a beneficial shift for US exporters, emphasizing how currency strength directly impacts competitive positioning on a global scale.