Color and design

The federal government began issuing currency that was backed by Spanish dollars during the American Civil War. As photographic technology of the day could not reproduce color, it was decided the back of the bills would be printed in a color other than black. Because the color green was seen as a symbol of stability, it was selected. These bills were known as "greenbacks" for their color and started a tradition of the United States' printing the back of its money in green. In contrast to the currency notes of many other countries, Federal Reserve notes of varying denominations are the same colors: predominantly black ink with green highlights on the front, and predominantly green ink on the back. Federal Reserve notes were printed in the same colors for most of the 20th century, although older bills called "silver certificates" had blue highlights on the front, and "United States notes" had red highlights on the front.

In 1929, sizing of the bills was standardized (involving a 25% reduction in their current sizes, compared to the older, larger notes nicknamed "horse blankets"). Modern U.S. currency, regardless of denomination, is 2.61 inches (66.3 mm) wide, 6.14 inches (156 mm) long, and 0.0043 inches (0.109 mm) thick. A single bill weighs about one gram and costs approximately 4.2 cents for the Bureau of Engraving and Printing to produce.

Microprinting and security threads were introduced in the 1991 currency seAnother series started in 1996 with the $100 note, adding the following changes:

- A larger portrait, moved off-center to create more space to incorporate a watermark.

- The watermark to the right of the portrait depicting the same historical figure as the portrait. The watermark can be seen only when held up to the light (and had long been a standard feature of all other major currencies).

- A security thread that will glow red when exposed to ultraviolet light in a dark environment. The thread is in a unique position on each denomination.

- Color-shifting ink that changes from green to black when viewed from different angles. This feature appears in the numeral on the lower right-hand corner of the bill front.

- Microprinting in the numeral in the note's lower left-hand corner and on Benjamin Franklin's coat.

- Concentric fine-line printing in the background of the portrait and on the back of the note. This type of printing is difficult to copy well.

- The value of the currency written in 14pt Arial font on the back for those with sight disabilities.

- Other features for machine authentication and processing of the currency.

Annual releases of the 1996 series followed. The $50 note on June 12, 1997, introduced a large dark numeral with a light background on the back of the note to make it easier for people to identify the denomination. The $20 note in 1998 introduced a new machine-readable capability to assist scanning devices. The security thread glows green under ultraviolet light, and "USA TWENTY" and a flag are printed on the thread, while the numeral "20" is printed within the star field of the flag. The microprinting is in the lower left ornamentation of the portrait and in the lower left corner of the note front. As of 1998, the $20 note was the most frequently counterfeited note in the United States.

On May 13, 2003, the Treasury announced that it would introduce new colors into the $20 bill, the first U.S. currency since 1905 (not counting the 1934 gold certificates) to have colors other than green or black. The move was intended primarily to reduce counterfeiting, rather than to increase visual differentiation between denominations. The main colors of all denominations, including the new $20 and $50, remain green and black; the other colors are present only in subtle shades in secondary design elements. This contrasts with the euro and other currencies, in which the main banknote colors contrast strongly with one another.

The new $20 bills entered circulation on October 9, 2003, the new $50 bills on September 28, 2004. The new $10 notes were introduced in 2006. The new $5 bills on March 13, 2008. Each will have subtle elements of different colors, though will continue to be primarily green and black. The Treasury said it will update Federal Reserve notes every 7 to 10 years to keep up with counterfeiting technology. In addition, there have been rumors that future banknotes will use embedded RFID microchips as another anti-counterfeiting tool.

The 2008 $5 bill contains significant new security updates. The obverse side of the bill includes patterned yellow printing that will cue digital image-processing software to prevent digital copying, watermarks, digital security thread, and extensive microprinting. The reverse side includes an oversized purple number 5 to provide easy differentiation from other denominations.

On April 21, 2010, the US Government announced a heavily redesigned $100 bill that featured bolder colors, color shifting ink, microlenses, and other features. It was scheduled to start circulating February 10, 2011. It will cost 11.8 cents to produce each bill.

"The soundness of a nation's currency is essential to the soundness of its economy. And to uphold our currency's soundness, it must be recognized and honored as legal tender and counterfeiting must be effectively thwarted," Federal Reserve Chairman Alan Greenspan said at a ceremony unveiling the $20 bill's new design. Prior to the current design, the most recent redesign of the U.S. dollar bill was in 1996.ries.

Conclusion The US dollar is the world’s reserve currency. Most central banks have holdings of dollars for the express purpose of financial dealings. The dollar is highly sensitive to changes in the interest rates. The US economy is basically a consumer oriented one and consequently runs a large trade deficit. Another factor that affects the dollar rate is the price of crude oil trading as the largest expense for the US is energy. Therefore, when the price of oil rises it tends to weaken the dollar. Other factors that determine the value of the dollar are political changes and the regular defense expenses of the country.