Dollar Dominance in FX Trading

References

• Alvarez F, Atkeson A, Kehoe PJ (2009) Time-varying risk, interest rates, and exchange rates in general equilibrium. Rev. Econom. Stud. 76(3):851–878.Crossref, Google Scholar
• Andersen L, Duffie D, Song Y (2019) Funding value adjustments. J. Finance 74(1):145–192.Crossref, Google Scholar
• Bahaj S, Reis RA (2020) Jumpstarting an international currency. Bank of England Working Paper No. 874, Bank of England, London.Google Scholar
• Barndorff-Nielsen OE, Shephard N (2002) Econometric analysis of realized volatility and its use in estimating stochastic volatility models. J. Royal Statist. Soc. Ser. B: Statist. Methodology 64(2):253–280.Crossref, Google Scholar
• Bjønnes GH, Rime D (2005) Dealer behavior and trading systems in foreign exchange markets. J. Financial Econom. 75(3):571–605.Crossref, Google Scholar
• Black SW (1991) Transactions costs and vehicle currencies. J. Internat. Money Finance 10(4):512–526.Crossref, Google Scholar
• Bruno V, Shin HS (2017) Global dollar credit and carry trades: A firm-level analysis. Rev. Financial Stud. 30(3):703–749.Crossref, Google Scholar
• Bruno V, Shin HS (2023) Dollar and exports. Rev. Financial Stud. 36(8):2963–2996.Crossref, Google Scholar
• Bruno V, Kim S-J, Shin HS (2018) Exchange rates and the working capital channel of trade fluctuations. AEA Papers Proc. 108:531–536.Crossref, Google Scholar
• Caballero RJ, Krishnamurthy A (2003) Excessive dollar debt: Financial development and underinsurance. J. Finance 58(2):867–893.Crossref, Google Scholar
• Caballero RJ, Krishnamurthy A (2009) Global imbalances and financial fragility. Amer. Econom. Rev. 99(2):584–588.Crossref, Google Scholar
• Caballero RJ, Farhi E, Gourinchas P-O (2008) An equilibrium model of “global imbalances” and low interest rates. Amer. Econom. Rev. 98(1):358–393.Crossref, Google Scholar
• Caballero RJ, Farhi E, Gourinchas P-O (2017) The safe assets shortage conundrum. J. Econom. Perspect. 31(3):29–46.Crossref, Google Scholar
• Caballero RJ, Farhi E, Gourinchas P-O (2021) Global imbalances and policy wars at the zero lower bound. Rev. Econom. Stud. 88(6):2570–2621.Crossref, Google Scholar
• Cespa G, Gargano A, Riddiough SJ, Sarno L (2021) Foreign exchange volume. Rev. Financial Stud. 35(5):2386–2427.Crossref, Google Scholar
• Chaboud AP, Chernenko SV, Wright JH (2008) Trading activity and macroeconomic announcements in high-frequency exchange rate data. J. Eur. Econom. Assoc. 6(2–3):589–596.Crossref, Google Scholar
• Chaboud AP, Chiquoine B, Hjalmarsson E, Vega C (2014) Rise of the machines: Algorithmic trading in the foreign exchange market. J. Finance 69(5):2045–2084.Crossref, Google Scholar
• Chahrour R, Valchev R (2021) Trade finance and the durability of the dollar. Rev. Econom. Stud. 89(4):1873–1910.Crossref, Google Scholar
• Chrystal KA (1977) Demand for international media of exchange. Amer. Econom. Rev. 67(5):840–850.Google Scholar
• Cohn JB, Liu Z, Wardlaw MI (2022) Count (and count-like) data in finance. J. Financial Econom. 146(2):529–551.Crossref, Google Scholar
• Czech R, Della Corte P, Huang S, Wang T (2021) FX option volume. Bank of England Staff Working Paper No. 964, Bank of England, London.Google Scholar
• Davies S, Kent C (2020) US dollar funding: An international perspective. CGFS Papers No. 65, Committee on the Global Financial System, Basel, Switzerland.Google Scholar
• Devereux MB, Shi S (2013) Vehicle currency. Internat. Econom. Rev. 54(1):97–133.Crossref, Google Scholar
• Doepke M, Schneider M (2017) Money as a unit of account. Econometrica 85(5):1537–1574.Crossref, Google Scholar
• Du W, Tepper A, Verdelhan A (2018) Deviations from covered interest rate parity. J. Finance 73(3):915–957.Crossref, Google Scholar
• Eren E, Malamud S (2022) Dominant currency debt. J. Financial Econom. 144(2):571–589.Crossref, Google Scholar
• Evans MD (2002) FX trading and exchange rate dynamics. J. Finance 57(6):2405–2447.Crossref, Google Scholar
• Evans MD, Lyons RK (2002) Order flow and exchange rate dynamics. J. Political Econom. 110(1):247–290.Crossref, Google Scholar
• Evans MD, Lyons RK (2005) Do currency markets absorb news quickly? J. Internat. Money Finance 24(2):197–217.Crossref, Google Scholar
• Farhi E, Maggiori M (2017) A model of the international monetary system. Quart. J. Econom. 133(1):295–355.Crossref, Google Scholar
• Fischer AM, Ranaldo A (2011) Does FOMC news increase global FX trading? J. Banking Finance 35(11):2965–2973.Crossref, Google Scholar
• Foster FD, Viswanathan S (1990) A theory of the interday variations in volume, variance, and trading costs in securities markets. Rev. Financial Stud. 3(4):593–624.Crossref, Google Scholar
• Foucault T, Kozhan R, Tham WW (2016) Toxic arbitrage. Rev. Financial Stud. 30(4):1053–1094.Crossref, Google Scholar
• Foucault T, Pagano M, Röell A (2013) Market Liquidity: Theory Evidence, and Policy (Oxford University Press, Oxford, UK).Crossref, Google Scholar
• Frazzini A, Israel R, Moskowitz TJ (2018) Trading costs. Preprint, submitted August 22, https://doi.org/10.2139/ssrn.3229719.Google Scholar
• Froot KA, Ramadorai T (2005) Currency returns, intrinsic value, and institutional-investor flows. J. Finance 60(3):1535–1566.Crossref, Google Scholar
• Fukui M, Nakamura E, Steinsson J (2025) The macroeconomic consequences of exchange rate depreciations. Quart. J. Econom. 140(4):3015–3065. Crossref, Google Scholar
• Glosten LR, Harris LE (1988) Estimating the components of the bid/ask spread. J. Financial Econom. 21(1):123–142.Crossref, Google Scholar
• Goldberg LS, Tille C (2008) Vehicle currency use in international trade. J. Internat. Econom. 76(2):177–192.Crossref, Google Scholar
• Gopinath G, Stein JC (2020) Banking, trade, and the making of a dominant currency. Quart. J. Econom. 136(2):783–830.Crossref, Google Scholar
• Gopinath G, Boz E, Casas C, Díez FJ, Gourinchas P-O, Plagborg-Møller M (2020) Dominant currency paradigm. Amer. Econom. Rev. 110(3):677–719.Crossref, Google Scholar
• Gourinchas P-O, Rey H, Sauzet M (2019) The international monetary and financial system. Annual Rev. Econom. 11(1):859–893.Crossref, Google Scholar
• Grömping U (2007) Estimators of relative importance in linear regression based on variance decomposition. Amer. Statist. 61(2):139–147.Crossref, Google Scholar
• Hartmann P (2004) Currency Competition and Foreign Exchange Markets (Cambridge University Press, Cambridge, UK).Google Scholar
• Hasbrouck J (1991a) Measuring the information content of stock trades. J. Finance 46(1):179–207.Crossref, Google Scholar
• Hasbrouck J (1991b) The summary informativeness of stock trades: An econometric analysis. Rev. Financial Stud. 4(3):571–595.Crossref, Google Scholar
• Hasbrouck J, Levich R (2017) FX market metrics: New findings based on CLS bank settlement data. NBER Working Paper No. 23206, National Bureau of Economic Research, Cambridge, MA.Google Scholar
• Hasbrouck J, Levich RM (2021) Network structure and pricing in the FX market. J. Financial Econom. 141(2):705–729.Crossref, Google Scholar
• Hassan TA (2013) Country size, currency unions, and international asset returns. J. Finance 68(6):2269–2308.Crossref, Google Scholar
• He Z, Krishnamurthy A, Milbradt K (2019) A model of safe asset determination. Amer. Econom. Rev. 109(4):1230–1262.Crossref, Google Scholar
• Hodrick RJ (1992) Dividend yields and expected stock returns: Alternative procedures for inference and measurement. Rev. Financial Stud. 5(3):357–386.Crossref, Google Scholar
• Ilzetzki E, Reinhart CM, Rogoff KS (2019) Exchange arrangements entering the twenty-first century: Which anchor will hold? Quart. J. Econom. 134(2):599–646.Crossref, Google Scholar
• Jiang Z, Krishnamurthy A, Lustig H (2021) Foreign safe asset demand and the dollar exchange rate. J. Finance 76(3):1049–1089.Crossref, Google Scholar
• Jiang Z, Krishnamurthy A, Lustig H (2024) Dollar safety and the global financial cycle. Rev. Econom. Stud. 91(5):2878–2915. Crossref, Google Scholar
• Johnson JW, LeBreton JM (2004) History and use of relative importance indices in organizational research. Organ. Res. Methods 7(3):238–257.Crossref, Google Scholar
• Karnaukh N, Ranaldo A, Söderlind P (2015) Understanding FX liquidity. Rev. Financial Stud. 28(11):3073–3108.Crossref, Google Scholar
• Khetan U, Sinagl P (2022) Uninformed but predictable: Corporate trading and price discovery in over-the-counter FX markets. Preprint, submitted April 29, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4090782.Google Scholar
• Krugman PR (1980) Vehicle currencies and the structure of international exchange. J. Money Credit Banking 12(3):513–526.Crossref, Google Scholar
• Kyle AS (1985) Continuous auctions and insider trading. Econometrica 53(6):1315–1335.Crossref, Google Scholar
• Kyle AS (1989) Informed speculation with imperfect competition. Rev. Econom. Stud. 56(3):317–355.Crossref, Google Scholar
• Lindeman RH, Merenda PF, Gold RZ (1980) Introduction to Bivariate and Multivariate Analysis (Scott, Foresman and Company, Glenview, IL).Google Scholar
• Lustig H, Verdelhan A (2007) The cross section of foreign currency risk premia and consumption growth risk. Amer. Econom. Rev. 97(1):89–117.Crossref, Google Scholar
• Lyons RK, Moore MJ (2009) An information approach to international currencies. J. Internat. Econom. 79(2):211–221.Crossref, Google Scholar
• Maggiori M (2017) Financial intermediation, international risk sharing, and reserve currencies. Amer. Econom. Rev. 107(10):3038–3071.Crossref, Google Scholar
• Maggiori M, Neiman B, Schreger J (2020) International currencies and capital allocation. J. Political Econom. 128(6):2019–2066.Crossref, Google Scholar
• Mancini L, Ranaldo A, Wrampelmeyer J (2013) Liquidity in the foreign exchange market: Measurement, commonality, and risk premiums. J. Finance 68(5):1805–1841.Crossref, Google Scholar
• Matsuyama K, Kiyotaki N, Matsui A (1993) Toward a theory of international currency. Rev. Econom. Stud. 60(2):283–307.Crossref, Google Scholar
• Moore M, Schrimpf A, Sushko V (2016) Downsized FX markets: Causes and implications. BIS Quart. Rev. 1–17.Google Scholar
• Mukhin D (2022) An equilibrium model of the international price system. Amer. Econom. Rev. 112(2):650–688.Crossref, Google Scholar
• Newey WK, West KD (1994) Automatic lag selection in covariance matrix estimation. Rev. Econom. Stud. 61(4):631–653.Crossref, Google Scholar
• Payne R (2003) Informed trade in spot foreign exchange markets: An empirical investigation. J. Internat. Econom. 61(2):307–329.Crossref, Google Scholar
• Portes R, Rey H (1998) The emergence of the euro as an international currency. NBER Working Paper No. 6424, National Bureau of Economic Research, Cambridge, MA.Google Scholar
• Rahmouni-Rousseau I, Churm R (2018) Monitoring of fast-paced electronic markets. BIS Markets Committee Report, Bank for International Settlements, Basel, Switzerland.Google Scholar
• Ranaldo A, Santucci de Magistris P (2022) Liquidity in the global currency market. J. Financial Econom. 146(3):859–883.Crossref, Google Scholar
• Ranaldo A, Somogyi F (2021) Asymmetric information risk in FX markets. J. Financial Econom. 140(2):391–411.Crossref, Google Scholar
• Rey H (2001) International trade and currency exchange. Rev. Econom. Stud. 68(2):443–464.Crossref, Google Scholar
• Rime D, Schrimpf A, Syrstad O (2022) Covered interest parity arbitrage. Rev. Financial Stud. 35(11):5185–5227.Crossref, Google Scholar
• Rostek M, Yoon JH (2021) Exchange design and efficiency. Econometrica 89(6):2887–2928.Crossref, Google Scholar
• Stoll HR (1989) Inferring the components of the bid-ask spread: Theory and empirical tests. J. Finance 44(1):115–134.Crossref, Google Scholar
• Tille C, Mehl A, Georgiadis G, Mezo HL (2021) Fundamentals vs. policies: Can the US dollar’s dominance in global trade be dented? ECB Working Paper No. 2021/2574, European Central Bank, Frankfurt, Germany.Google Scholar
• Vives X (2011) Strategic supply function competition with private information. Econometrica 79(6):1919–1966.Crossref, Google Scholar