Some U.S. Treasuries held overseas are owned by private parties and some by governments. Private parties hold them for the same reason that private parties in the U.S. hold them, they are perceived as highly liquid, low risk assets. Foreign government hold U.S.Treasuries for both political and economic reasons. You have to investigate each case to find out what the reasons are. Here is an article a bout Belgium’s recent buying spree:
Here are the foreign holdings of U.S. Treasuries by country:
Some U.S. dollars held overseas are owned by private parties and some by governments. Private parties hold them because they serve as a medium of exchange and store of value. Foreign governments have political as well as economic reasons for holding U.S. dollars. You have to investigate each case to discover the reasons.
Here’s an analysis of foreign dollar holdings in 1996:
Here’s a more recent analysis: