Final answer:
The Bretton Woods system was replaced by a system of floating exchange rates after its collapse in 1971, allowing the US dollar to fluctuate freely according to market forces.
Step-by-step explanation:
After the death of the Bretton Woods system, the dominant exchange rate system in the US became one of floating exchange rates. The Bretton Woods system established fixed exchange rates, which connected national currencies to the US dollar, which in turn was tied to gold. However, facing various economic pressures including the competition from post-war industrial development in Asia and Western Europe, and increased foreign dollar holdings that surpassed U.S. gold reserves, the United States under President Richard Nixon's administration put an end to fixed exchange rates in 1971.
This drastic policy shift meant that the US dollar and other currencies could now fluctuate freely on the foreign exchange market, subject to market forces without a preset value to gold or any other standard. This shift to floating exchange rates still remains the dominant exchange rate system for the US currency in the present global economy.