Meanwhile,
Economic planet | can euro:
After decades of hegemony of the Dollar King. Furthermore, and at a time when Trump’s policy unclogs confidence in the greenback, some dream in Europe to see him leave his crown at the Euro. In addition, But the task looks difficult.
Posted at 11:00 a.m.
“It’s time for a“ world Euro ”. Moreover, ” said the president of the European Central Bank, Christine Lagarde recently. Consequently, The boss of the IMF, Kristalina Georgieva, spoke economic planet | can euro of “a great opportunity”.
“Strengthening the international role of the Euro” is also part of the agenda of the European Summit which is held until Friday. Furthermore, but remains dominated by the geopolitical situation.
Why are we talking about it? – Economic planet | can euro
In recent months. Nevertheless, the trade war launched by US President Donald Trump and worries about American finances have had the confidence of investors in the US economy and its currency.
The greenback has been playing in its lowest levels last Thursday for three years. Meanwhile, according to the dollar index which compares it to a basket of other currencies.
Conversely, gold and currencies like the Swiss franc where the euro are on the rise.
In summary. investors sulk the products economic planet | can euro associated with the United States to bet on other assets, and protect themselves from the instability fueled by Trump.
“We come out of a long period during which the dollar had more credibility than any other currency. ” notes Nicolas Véron, researcher at the Center for American Reflection Peterson Institute, a phenomenon that dates back to the post-war period.
Supplant the dollar, what to do? – Economic planet | can euro
The biggest asset would be the ability to go into debt a priori without limits. because investors are looking for world reference assets, in calm weather as in times of crisis.
“What is more. less indisputable is that a reserve asset produces downward pressure on borrowing costs,” notes Isabelle Mateos y Lago, chief economist at BNP Paribas bank.
For European citizens, economic planet | can euro this can result in credits at more advantageous rates or more abundant public investments.
It is the “exorbitant privilege” of a powerful currency. an expression used in 1964 by the former French president Valery Giscard d’Estaing about the dollar: Washington was able to go into debt as he understood, because international investors bought his debt.
A motto with this status also allows companies and households to better resist international shocks.
And the negative effects?
The internationalization of a currency is generally accompanied by its overvaluation. This caused Donald Trump’s anger, for whom a strong dollar weakens American exporters.
The Swiss franc. acclaimed by investors currently, has for example saw its value strongly increase in recent months, which has worried the Swiss Central Bank.
A reinforcement of the euro would risk eroding the competitiveness of European exports.
Where is the euro?
“It is important to distinguish between what is a process of rebalancing. what is a rocking in which the euro would become the reference currency to replace the dollar,” warns Mr. Véron. According to him, “this rocking process for the moment does not exist”.
The greenback is ultradominating in trade where products such as oil. planes are paid in dollars, in exchange reserves of central banks, even if it goes back, and in interbank payments.
“There is great progress to make. ” according to Mme Mateos y Lago, who insists on the necessary improvement in European financial “plumbing”: the Union of capital markets, which is struggling to move forward, and the idea economic planet | can euro of a European common debt.
“We have to deserve it,” insisted Mme Lagarde in a platform at Financial Times.
From there to remind the dollar to the closet? “The diversification compared to the dollar will take time. may not be done for the benefit of a single currency,” thinks Kathleen Brooks, director of economic research at the Broker XTB. “The future could be made of multiple global currencies. »»
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