Section 3 — The Global Financial Order
Session 9 of 16
Monday, May 4, 2026
Currency and exchange rates
The US dollar controls the global economy — and this session explains exactly why and how. You'll learn the vocabulary of exchange rates, currency markets, and reserve currencies, and you'll understand why your own country's currency rises and falls, what that means for your income, and why dollar dominance is both the foundation of American power and a growing source of global frustration.
Vocabulary for this session
exchange rateappreciationdepreciationdevaluationrevaluationfixed ratefloating ratepegforexreserve currencyconvertiblespeculatecurrency warpurchasing power parity
Grammar focus
Grammar focus: Cause and effect with "when" and "if" — "When a currency weakens, exports become cheaper but imports cost more." "If a country raises interest rates, its currency tends to appreciate." This structure is standard in economic analysis and journalism.
Come prepared to discuss
"Is it fair that one country's currency controls the global economy? What would a fairer international monetary system look like?"
Before this session
Prepare: Before this session, look up the current exchange rate between your local currency and the US dollar. Has it changed significantly in the past year? Write one sentence about what a weaker local currency means for your everyday life.
Task-Based Activity
Currency trader simulation. Give each student a "currency card" assigning them a country and a news event (e.g. "Brazil: central bank raises interest rates by 1%", "Japan: trade deficit announced", "UK: political crisis, Prime Minister resigns", "Saudi Arabia: oil exports at record high", "Turkey: inflation hits 80%"). Students must decide: should investors buy or sell your currency given this news? And why? Students circulate, explaining their position in English: "I am buying [currency] because… I expect [currency] to weaken because… I am selling [currency] because the risk of… means…" After 10 minutes, debrief: which currencies strengthened? Which weakened? Why? Connect to the vocabulary: appreciation, depreciation, speculate, capital flows.
Career-Oriented Take — How to Frame It
Exchange rate risk is one of the most underestimated financial risks for working professionals. Anyone paid in one currency and living in another (remote workers, expats, international freelancers), anyone importing or exporting goods, or anyone holding savings in a foreign currency is exposed. Understanding how to describe this risk in English — and how to hedge against it — is a practical professional skill with direct financial consequences. Many professionals lose thousands of dollars a year to exchange rate movements they don't understand.
Big Picture — Global Financial Order
The US dollar is the world's reserve currency — approximately 60% of global foreign exchange reserves, 80% of international trade invoices, and nearly all commodity contracts (especially oil) are denominated in dollars. This gives the US what French Finance Minister Valéry Giscard d'Estaing called an "exorbitant privilege": the US can run indefinite trade deficits (importing more than it exports), sanction any country by cutting off dollar access, and export inflation to the rest of the world by printing money. Dollar dominance is the financial foundation of American global power — and it is increasingly contested.
Current Events Take
The BRICS nations (Brazil, Russia, India, China, South Africa — now expanded to include Egypt, UAE, Iran, Ethiopia) are actively building alternatives to dollar dominance: settling trade in local currencies, discussing a shared BRICS currency or payment system, and accumulating gold instead of dollar reserves. China's yuan is slowly internationalizing. Saudi Arabia has discussed pricing some oil sales in yuan. Meanwhile, Russia's $300 billion in dollar-denominated reserves were frozen in 2022, accelerating global nervousness about dollar dependence. Is dollar dominance ending? The evidence is mixed — but the question is no longer theoretical.
Homework (assign after session)
Look up the exchange rate between your currency and the US dollar over the past 10 years (use xe.com or tradingeconomics.com). Write: "My currency has [appreciated/depreciated/stayed stable] against the dollar over 10 years. I think the main reason is… The effect on my country has been… If my currency weakened further, the consequence would be…"