Creating an alternative reserve currency to the USD is not an easy option – Rabobank

News

“Currently the US exerts huge control over global financial activity as a result of the dominance of the USD in payments systems. Consequently the threat that a company’s access to USD payments systems could be blocked carries significant weight,” note Rabobank analysts.

Key quotes

“This is why there have been accusations that Trump has weaponised the USD. That said, creating an alternative reserve currency to the USD is not an easy option.”

“Since its inception in 1999, the EUR has consistently been the second most used currency and the gap between itself and the USD is large on almost every measure. Central banks continue to hold a significantly greater share of reserves in USDs, a greater amount of debt is issued in USD internationally and more international payments are denominated in USD.”

“The EUR might make some progress in catching up with the dollar if the EC is successful in increasing its use in international transactions, though in reality the single currency’s reputation is
likely too closely linked with crisis for it to make any meaningful threat to the USD’s position in the next decade at least.” 

Products You May Like

Articles You May Like

EU ready to make further offers on backstop to Britain – HB Citing Sources
XAGUSD Daily – Q1 2019 Market Outlook – Wave Analysis
A $3.5 billion money manager makes a bullish market case for DC’s partisan gridlock
Cramer’s game plan: This week, forecasts are more important than earnings
China says will work hard to ensure stable employment

Leave a Reply

Your email address will not be published. Required fields are marked *