Why is "$" the symbol for the American dollar?

The American dollar sign, popularly supposed to be derived from the letters U and S, is, instead a direct descendant of the Spanish abbreviation "ps" for "pesos."
So, the official position Of the Department of Treasury is that the "S" gradually came to be written over the "P" in the "pesos" abbreviation.
The "$" sign was widely used before the adoption of the United States dollar in 1785.
Spanish and Mexican coins were the main currency in many parts of the United States in the eighteenth and and much of the nineteenth centuries.
We're still not sure if the $ look more like a P and an S than a U and a S,
but at least the abbreviation of "pesos" makes more sense than a shortening of "United States."
                                  http://associatedcontent.com/article/470088/the_origin_of_the_us_dollar_sign.html