Since the euro’s inception, policymakers have dreamed of eroding the dominance of the U.S. dollar in global finance and trade, which gives the U.S. government and businesses lower financing costs, a vital advantage in a global competition for capital. But so far, the single currency has fallen short of expectations.
The dollar accounts for about 90 percent of global transactions and it remains the benchmark against which other currencies are measured against, said Joan Feldbaum-Vidra, senior managing director of sovereigns at credit rating agency KBRA.
According to the ECB’s 2024 report on the role of the euro, about 60 percent of foreign bonds are issued in dollars. The euro, meanwhile, stands at 20 percent, a share that has stayed roughly stable for 10 years. To the extent that the dollar has lost ground, for example in countries’ reserves of foreign exchange, it’s been due to the rise of third currencies,…
