Extra bare wire in USB cable
This is a shielding ground wire (or S-GND) which is left bare on purpose, so it makes contact with the foil. It has to be connected (crimped or soldered) to the metal casing of the USB receptacle / plug at the end of the cable. If your device includes a USB connector, S-GND can be connected to the device ground (same as GND), but this connection is optional.
The reason this wire is used in addition to the foil is that you cannot crimp or solder alunimium foil reliably. On the other hand, making the whole shielding out of copper (i.e. copper foil or woven copper shield) would be too expensive.
That is the drain wire that helps carry charge off of the foil jacket and carries more current than the foil can.
It is part of the shield/ground of the cable.
As far as how to terminate it, that depends on what function it serves in your system. There are several purposes for that shielding:
- Reducing EMI emissions
- Reducing EMI susceptibility
- Defining cable impedance
- Providing a discharge route for ESD
The shield ground should factor into your grounding strategy, especially keeping in mind that there will be large discharges coming down that shield wire in user-pluggable systems. (as opposed to fixed, industrial type installations)