What is the US Dollar?
The United States Dollar is the most dominant reserve currency in the world and is the official currency of several countries and unofficially accepted in many other countries.
Nicknamed the 'greenback', the US dollar is the benchmark currency for comparisons against other international currencies.
Uses of the US Dollar
The US Dollar is the national currency for the United States of America. The US currency is also used as the unit of measure for majority of commodities around the world.
With America being the largest economy their currency is also used around the world as an accepted means of paying for goods and services. This is due to expectation of the US Dollar being a more stable currency than that of the country which accepts it as payment.
Risks of the US Dollar
With any currency there is always the risk that the value will decrease against another currency from a different country. This can be due to lower export of local commodities, recession or global instability such as a world war.
All futures contracts will feature the same risk through the direction in which you anticipate the contract to rise or fall. If you anticipate a currency to increase in value and it ends up falling in value. The long position that you hold will also fall in value.