Core Insights - The article discusses how the U.S. benefits from the dollar's unique status in the global economy, allowing it to easily profit from international trade [1][4][18] - It highlights the historical context of the dollar's dominance, tracing it back to the Bretton Woods Conference in 1944, which established the dollar's pivotal role in the international monetary system [18][20][22] Group 1: Dollar's Unique Position - The dollar allows the U.S. to run trade deficits without the same consequences faced by other countries, as it can simply print more money to cover its deficits [4][9] - Other countries exchange their goods for U.S. dollars, which are printed at a very low cost, creating a system where the U.S. gains valuable products in return for cheap currency [7][9] - The dollar's dominance in international trade means that countries often prefer to use it for transactions, even when trading among themselves, due to established practices and reduced risks [10][12][14] Group 2: Historical Context - The Bretton Woods Conference established a system where the dollar was pegged to gold, solidifying its status as the world's primary reserve currency [18][20] - Post-World War II, the U.S. held a significant share of global economic power, which contributed to the acceptance of the dollar's central role in international trade [20][22] - Despite the collapse of the Bretton Woods system in the 1970s, the dollar's dominance has persisted, with over 60% of global foreign exchange reserves held in dollars [22]

Figure 1. Latest flows in DM and EM equity funds by geo focus | 14- May- 2025 | | Weekly Flow (USD bn) | | | Fund | 13W Wkly | | --- | --- | --- | --- | --- | --- | --- | | | | ETF (blue) vs non- ETF (grey) | | | Perf | Flow | | -10.0 | - | 10.0 | 20.0 | 30.0 | | | | Global | 5.2 | 5.1 | 0.2 | | 2.7% | | | North America | 20.0 | 20.5 | -0.6 | | 4.6% | | | Western Europe | 2.7 | 2.2 | 0.5 | | 1.7% | | | JP | 0.8 | 2.1 | -1.3 | | 2.3% | | | DM AxJ | -0.3 | -0.1 | -0.2 | | 1.7% | | | GEM | -0.2 | 1.4 | -1.6 | ...

Group 1 - Global stock funds experienced the smallest weekly inflow in four weeks, with only $856 million bought, compared to $6.13 billion the previous week [2] - European stock funds saw strong demand for the fourth consecutive week, with net inflows of $12.81 billion, while U.S. funds faced net outflows of $16.22 billion for the fourth week [5] - Industry funds recorded net selling for the ninth consecutive week, with a net outflow of approximately $2.6 billion, led by financial and metals/mining sectors [5] Group 2 - Global bond funds were favored last week, with a total net inflow of $11.4 billion, the highest in nine weeks, and demand for dollar-denominated bond funds rose significantly [7] - Global money market funds saw a massive inflow of $66.3 billion, the largest since February 5 [8] - Gold and precious metals commodity funds experienced a net outflow of $655 million, marking the second outflow in 13 weeks [9]