Close Menu
Influential MagazineInfluential Magazine
  • Home
  • Latest News
  • Entrepreneurs
  • Business
  • Finance
  • Leadership
  • More
    • Web Stories
    • Editor’s Picks
    • Press Release

Subscribe to Updates

Get the latest business and finance news for entrepreneurs all around the world.

What's Hot
Plastic Spoons, Umbrellas, Violins: A Guide to What Americans Buy From China

Plastic Spoons, Umbrellas, Violins: A Guide to What Americans Buy From China

May 24, 2025
Are You Smarter Than a Billionaire?

Are You Smarter Than a Billionaire?

May 22, 2025
Wedding Belles Love Expands with Size-Inclusive, Same-Day Bridalwear Boutique

Wedding Belles Love Expands with Size-Inclusive, Same-Day Bridalwear Boutique

May 22, 2025
Facebook X (Twitter) Instagram
Facebook X (Twitter) Instagram
Influential MagazineInfluential Magazine
SUBSCRIBE
  • Home
  • Latest News
  • Entrepreneurs
  • Business
  • Finance
  • Leadership
  • More
    • Web Stories
    • Editor’s Picks
    • Press Release
Influential MagazineInfluential Magazine
Home » U.S. Dollar Falls. The Euro Could Step Up as Reserve Currency

U.S. Dollar Falls. The Euro Could Step Up as Reserve Currency

May 1, 20253 Mins Read Business
U.S. Dollar Falls. The Euro Could Step Up as Reserve Currency
Share
Facebook Twitter Reddit Telegram Pinterest Email

The U.S. dollar has fallen about 9 percent in the past three months, according to an index that tracks its performance against a basket of major trading partners. Not since the 1970s has the currency performed so badly in a president’s first 100 days.

The drop isn’t surprising. The U.S. economic outlook is far cloudier than it was on Inauguration Day, as President Trump’s tariffs set the stage for slower growth and higher inflation. U.S. assets look far less attractive now.

But could there be something more existential afoot? Questions are swirling about the dollar’s global standing and whether after more than seven decades as the world’s most important currency, it’s on the cusp of shedding that status.

Trump’s policies and his threats to longstanding norms like the political independence of the central bank have prompted a rethink among investors about how much more exposure they want to have to U.S. assets. That skepticism looks likely to endure. “Something is in motion that is irreversible,” said Jens Nordvig of the research firm Exante Data.

There are obvious caveats. Just because the dollar is weaker now doesn’t mean it has lost all its primacy. A sudden shift away from the United States still seems far-fetched because there are few places to go.

“The rest of the world is eager, if not desperate, to reduce reliance on the dollar as a payment and reserve currency,” said Eswar Prasad, a former official at the International Monetary Fund who is now an economics professor at Cornell University.

Attempts to weaponize the dollar through policies like sanctions would be less potent, and having multiple sources of liquidity during times of stress could make for a less fragile global financial system, some currency experts say.

“The reality, though, is that there are no robust alternatives,” Mr. Prasad said.

The euro is perhaps best positioned to eventually seize the opportunity created by Mr. Trump. It is a widely used and favored currency among central banks. There are now more euro-denominated safe assets available, as Germany and other countries increase spending. And the European Central Bank has also shown more willingness to serve as the region’s lender of last resort, a crucial function for an international currency.

When would the euro become a reserve currency? “We’re at the best position to become one in some years,” Luis de Guindos, the E.C.B.’s vice president, said recently. But there would have to be much more meaningful economic, financial and regulatory integration across Europe for that to happen. It would take time.

Other alternatives like China’s renminbi face even higher hurdles. Investors cannot transact freely in the country’s financial markets because of capital controls, and the currency is heavily managed by the government — two insurmountable barriers to the Chinese currency assuming a more global role.

Another idea that has gained traction is a shared currency issued by the so-called BRICS group of countries, which includes Brazil, Russia, India, China and South Africa. Already some of the participating countries, like Brazil and India, have backed off from the proposals following threats by Mr. Trump that they would have to “wave goodbye to America” if they did so.

Shifting away from the dollar presents as big of a challenge as trying to shift the world away from using English, said Stephen Jen, a currency expert who runs Eurizon SLJ Capital.

“People can bicker on whether French is more beautiful or German more precise, but none of that matters — when more people speak English, more will learn to speak English,” he said. “Dollar liquidity is deep. No one administration can destroy the dollar, certainly not President Trump in 100 days.”

Banking and Financial Institutions Currency Euro (Currency) International Trade and World Market Renminbi (Currency) reserve currency United States Economy US Dollar (Currency)
Share. Facebook Twitter Pinterest LinkedIn Telegram Reddit Email
Previous ArticleSharkNinja Recalls 1.8 Million Pressure Cookers After Burn Reports
Next Article Amazon Says Operating Profits May Decline Amid Economic Uncertainty

Related Posts

Plastic Spoons, Umbrellas, Violins: A Guide to What Americans Buy From China

Plastic Spoons, Umbrellas, Violins: A Guide to What Americans Buy From China

May 24, 2025
Are You Smarter Than a Billionaire?

Are You Smarter Than a Billionaire?

May 22, 2025
Markets Head Lower in Wake of Concerns About U.S. Debt

Markets Head Lower in Wake of Concerns About U.S. Debt

May 19, 2025
Video: How Staffing Shortages Have Plagued Newark Airport

Video: How Staffing Shortages Have Plagued Newark Airport

May 17, 2025
Consumers Show Signs of Strain Amid Trump’s Tariff Rollout

Consumers Show Signs of Strain Amid Trump’s Tariff Rollout

May 15, 2025
Inside Elon Musk’s X Feed: Trumpism, Falsehoods and Lots of Love for Elon Musk

Inside Elon Musk’s X Feed: Trumpism, Falsehoods and Lots of Love for Elon Musk

May 15, 2025
Add A Comment

Leave A Reply Cancel Reply

Demo
Stay In Touch
  • Facebook
  • Twitter
  • Pinterest
  • Instagram
  • YouTube
  • Vimeo
Don't Miss
Plastic Spoons, Umbrellas, Violins: A Guide to What Americans Buy From China

Plastic Spoons, Umbrellas, Violins: A Guide to What Americans Buy From China

By News RoomMay 24, 2025

Photo Illustration by Zak Bickel/The New York Times; Photographs via Getty; Unsplash Tariffs are up.…

Are You Smarter Than a Billionaire?

Are You Smarter Than a Billionaire?

May 22, 2025
Wedding Belles Love Expands with Size-Inclusive, Same-Day Bridalwear Boutique

Wedding Belles Love Expands with Size-Inclusive, Same-Day Bridalwear Boutique

May 22, 2025
Markets Head Lower in Wake of Concerns About U.S. Debt

Markets Head Lower in Wake of Concerns About U.S. Debt

May 19, 2025

Subscribe to Updates

Get the latest business and finance news for entrepreneurs all around the world.

About Us
About Us

Influential Magazine is one of the top news portals about Business and Finance news for Entrepreneurs and leaders all around the world, follow us for more intersting articles and news.

Our Picks
Markets Head Lower in Wake of Concerns About U.S. Debt

Markets Head Lower in Wake of Concerns About U.S. Debt

May 19, 2025
Video: How Staffing Shortages Have Plagued Newark Airport

Video: How Staffing Shortages Have Plagued Newark Airport

May 17, 2025
Father and Son Duo Launch PlayZer Media to Support Southern England’s Grassroots Music Scene

Father and Son Duo Launch PlayZer Media to Support Southern England’s Grassroots Music Scene

May 16, 2025
Trending Now
Inside Elon Musk’s X Feed: Trumpism, Falsehoods and Lots of Love for Elon Musk

Inside Elon Musk’s X Feed: Trumpism, Falsehoods and Lots of Love for Elon Musk

May 15, 2025
World Economic Forum Investigating Allegations Against Founder Klaus Schwab

World Economic Forum Investigating Allegations Against Founder Klaus Schwab

May 15, 2025
A.I. Was Coming for Radiologists’ Jobs. So Far, They’re Just More Efficient.

A.I. Was Coming for Radiologists’ Jobs. So Far, They’re Just More Efficient.

May 14, 2025
Influential Magazine
Facebook X (Twitter) Instagram LinkedIn
  • Home
  • Privacy Policy
  • Contact
  • Terms & Conditions
© 2025 Influential Mag. All Rights Reserved.

Type above and press Enter to search. Press Esc to cancel.