>* Wouldn't it make more sense if my bank automatically diversified my currency holdings to insulate me from international fluctuations?* Sure. You can do thi

>* Wouldn't it make more sense if my bank automatically diversified my currency holdings to insulate me from international fluctuations?* Sure. You can do this. But why would you rely on or expect your bank to do so, unless you wanted to pay for the service? >that's a mix of the top 10 most traded in some suitable ratio. The problem is there is no "suitable ratio". You're always speculating on the future value of currencies in the basket. Sure, the diversification will likely dampen the fluctuations, but you're equally likely to miss out on upside as downside. But again, countries are free to do this right now if they want to. In discussions like this, there's always some implication that the US is asserting some authority to force countries to use the dollar, and if they could somehow just get off it, everything would be grand. In reality, it's a conscious economic decision to use or peg to the US dollar. Sometimes it's great, other times (like now, with the EMs hurting and the US economy relatively strong) it isn't.