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Visualizing the Rise of the U.S. Dollar Since the 19th Century

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Visualizing the Rise of the U.S. Dollar Since the 19th Century

As the world’s reserve currency, the U.S. dollar made up 58.4% of foreign reserves held by central banks in 2022, falling near 25-year lows.

Today, emerging countries are slowly decoupling from the greenback, with foreign reserves shifting to currencies like the Chinese yuan.

At the same time, the steep appreciation of the U.S. dollar is leading countries to sell their U.S. foreign reserves to help prop up their currencies, in turn buying currencies such as the Australian and Canadian dollars to help generate higher yields.

The above animated graphic from James Eagle shows the rapid ascent of the U.S. dollar over the last century, and its gradual decline in recent years.

Dollar Dominance: A Brief History

In 1944, the U.S. dollar became the world’s reserve currency under the Bretton Woods Agreement. Over the first half of the century, the U.S. ran budget surpluses while increasing trade and economic ties with war-torn countries, expanding its influence as the world’s store of value.

Later through the 1960s, the U.S. dollar share of global foreign reserves rapidly increased as political allies stockpiled the dollar.

By 2000, dollar dominance hit a peak of 71% of global reserves. With the creation of the European Union a year earlier, countries such as China began increasing the share of euros in reserves. Between 2000 and 2005, the share of the dollar in China’s foreign exchange reserves fell by an estimated 15 percentage points.

The dollar began a long rally after the global financial crisis, which drove central banks to cut their dollar reserves to help bolster their currencies.

Fast-forward to today, and dollar reserves have fallen roughly 13 percentage points from their historical peak.

The State of the World’s Reserve Currency

In 2022, 16% of Russia’s export transactions were in yuan, up from almost nothing before the war. Brazil and Argentina have also begun adopting the Chinese currency for trade or reserve purposes. Still, the U.S. dollar makes up 80% of Brazil’s reserves.

Yet while the U.S. dollar has decreased in share of foreign reserves, it still has an immense influence in the world economy.

The majority of trade is invoiced in the U.S. dollar globally, a trend that has stayed fairly consistent over many decades. Between 1999-2019, 74% of trade in Asia was invoiced in dollars and in the Americas, it made up 96% of all invoicing.

Furthermore, almost 90% of foreign exchange transactions involve the U.S. dollar thanks to its liquidity.

However, countries are increasingly finding alternative options than the dollar. Today, Western businesses have begun settling trade with China in renminbi. Looking further ahead, digital currencies could provide options that don’t include the U.S. dollar.

Even more so, if the U.S. share of global GDP continues to shrink, the shift to a multipolar system could progress over this century.

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This article was published as a part of Visual Capitalist's Creator Program, which features data-driven visuals from some of our favorite Creators around the world.

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Ranked: Average Annual Salaries by Country

See how average annual salaries vary across 30 different countries, adjusted for purchasing power parity (PPP).

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Ranked: Average Annual Salaries by Country

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

There are many reasons for why salaries vary between countries: economic development, cost of living, labor laws, and a variety of other factors. Because of these variables, it can be difficult to gauge the general level of income around the world.

With this in mind, we’ve visualized the average annual salaries of 30 OECD countries, adjusted for purchasing power parity (PPP). This means that the values listed have taken into account the differences in cost of living and inflation between countries.

Data and Key Takeaways

This data was sourced from the OECD (Organisation for Economic Co-operation and Development), an international organization that promotes policies to improve economic and social well-being. It has 38 member countries, though in this instance, data for all of them was not available.

All figures are as of 2022.

RankCountryAverage Annual Salary
(USD, PPP adjusted)
1🇱🇺 Luxembourg78,310
2🇺🇸 U.S.77,463
3🇨🇭 Switzerland72,993
4🇧🇪 Belgium64,848
5🇩🇰 Denmark64,127
6🇦🇹 Austria63,802
7🇳🇱 Netherlands63,225
8🇦🇺 Australia59,408
9🇨🇦 Canada59,050
10🇩🇪 Germany58,940
11🇬🇧 UK53,985
12🇳🇴 Norway53,756
13🇫🇷 France52,764
14🇮🇪 Ireland52,243
15🇫🇮 Finland51,836
16🇸🇪 Sweden50,407
17🇰🇷 South Korea48,922
18🇸🇮 Slovenia47,204
19🇮🇹 Italy44,893
20🇮🇱 Israel44,156
21🇪🇸 Spain42,859
22🇯🇵 Japan41,509
23🇵🇱 Poland36,897
24🇪🇪 Estonia34,705
25🇨🇿 Czechia33,476
26🇵🇹 Portugal31,922
27🇭🇺 Hungary28,475
28🇸🇰 Slovak Republic26,263
29🇬🇷 Greece25,979
30🇲🇽 Mexico16,685

From this dataset we can see that Luxembourg, the U.S., and Switzerland offer the highest average annual salaries.

All three of these countries are highly developed economies with well-established service sectors, which typically lead to more high-paying jobs. The cost of living in these countries is also relatively high, necessitating higher wages to maintain a standard quality of life.

At the other end of this ranking, Mexico and Greece have the lowest average salaries. In Mexico’s case, the country’s economy has a large portion of lower-wage jobs, particularly in agriculture and manufacturing.

Greece, on the other hand, has struggled with consistently high unemployment since the 2008 global financial crisis. This puts downward pressure on wages because there is a surplus of labor.

See More Economics Graphics From Visual Capitalist

If you enjoy graphics like these, check out Visualized: The Most (and Least) Expensive Cities to Live In.

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