What currencies are pegged to USD?
Learn all about the US dollar’s pegs, including why countries peg their currencies to USD, and how it can affect forex trading.
Some countries and territories peg their currency to the US dollar to help stabilise exchange rates and support economic policy. While this can offer predictability, it also limits monetary flexibility and introduces external risks.
In this guide, we’ll cover how USD pegs work, which currencies are pegged to the dollar, why countries choose this approach, and what it means for forex traders.
What does it mean to peg a currency to the USD?
When a currency is pegged to the US dollar, its exchange rate is fixed or closely managed by the country’s central bank. Instead of letting market forces decide the rate – as with floating currencies – the bank intervenes to keep the value stable against the dollar.
A hard peg holds the rate constant, while a soft peg allows limited fluctuations within a set range. Pegging to the USD helps provide stability and predictability for trade, investment and economic policy – but can limit a country’s control over its own monetary decisions.