The Euro started out in 2002 with its value less than that of the US Dollar. Overtime, it has gained more value to the extent that it now takes at 1.3866 US Dollars, to source 1 euro. (Real time currency rate sourced from oanda.com at 0805 GMT on 17th September 2007)
Reuters reports this morning that the euro could replace the U.S. dollar as the world’s primary reserve currency. Reuters’ source is a German magazine that quoted former US Federal Reserve Chairman Alan Greenspan as saying on Monday.
Greenspan told weekly Stern it was “absolutely conceivable that the euro will replace the dollar as reserve currency, or will be traded as an equally important reserve currency,” the magazine said in a preview of this week’s edition.
The dollar no longer had much of a lead over the euro, he said, adding that the European Central Bank had “developed into a global economic force to be taken seriously.”
Information available on Wikipedia however, shows that the Euro replacing the US Dollar as top global currency might not be anytime soon.
The euro is widely perceived to be a major global reserve currency, sharing that status with the U.S. dollar (USD), albeit to a lesser degree. The U.S. dollar continues to enjoy its status as the primary reserve of most commercial and central banks worldwide.
Since its introduction, the euro has been the second most widely-held international reserve currency after the U.S. dollar. The euro inherited this status from the German mark, and since its introduction, has increased its standing somewhat, mostly at the expense of the dollar. The possibility for the euro to become the first international reserve currency in the near future is now widely debated among economists. There has been some suggestion that the recent weakness of the US dollar might encourage various parties to increase their reserves in euro at the expense of the dollar, but as the table below indicates, this does not yet seem to be a major trend. (emphasis mine)
I cannot reproduce the entire table here, for lack of space but the part of the table basically shows that as of 2006, the percentage of global currency reserves held in US dollars was 65.7%, while those held in Euro was 25.2%.
Whats your opinion about this?
The euro is going to take the place of the dollar, and anybody who says different..is on the take. As for those who remain under the illusion of the dollar…at the count of 3…wake up. 1, 2, …..
The EURO is a major reserve currency and is going to be more active in international trading in the comming year. As to replace the US dollar in reserves only time will tell as europe also needs the confidance of the rest of the world