Global Trade Currency Invoicing

Macroeconomics and Politics
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Currency invoicing refers to the choice of currency used to denominate and settle international trade transactions. When two countries engage in trade—say, exports and imports of goods or services—they must agree on a currency in which the invoice (i.e., the bill) will be issued. This currency is also typically used for payment settlement.

There are generally three types of invoicing practices:

  1. Producer Currency Pricing (PCP): Exports are invoiced in the currency of the exporting country.
  2. Local Currency Pricing (LCP): Imports are invoiced in the currency of the importing country.
  3. Dominant Currency Pricing (DCP): A third, globally dominant currency (most often the US dollar, sometimes the euro) is used regardless of the countries involved.
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Global trade hit a record $33 trillion in 2024, expanding 3.7% ($1.2 trillion), according to the UN Trade

  • According to the Atlantic Council, roughly 54% of global trade invoices are in USD, despite the U.S. accounting for only ~10% of world trade. Implying that ~$17 trillion of trade transactions are billed in USD annually. This equates to on the order of $1.4 trillion per month in dollar-denominated import/export payments
  • For the euro, ~30% of global trade invoices are in EUR, meaning $9.9 trillion annually. However, this share is significantly higher due to intra-EU trade being mostly in euros.
  • The yen and renminbi only account for about 4% of global trade invoicing.
  • Over the period 1999-2019, the dollar accounted for 96 percent of trade invoicing in the Americas, 74 percent in the Asia-Pacific region, and 79 percent in the rest of the world. The only exception is Europe, where the euro is dominant.

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