Thursday, December 28, 2006

Euro overtakes the dollar

Story: "“After the launch, we expected growth to stabilise – but it has continued over five years,” Antti Heinonen, head of the European Central Bank’s bank notes directorate, told the Financial Times.

Although the ECB does not deliberately promote the international use of the euro, it has become popular in official foreign exchange reserves – even if it is far from challenging the dollar’s lead as the most popular reserve currency.

News that euro notes are challenging the dollar may cheer eurozone politicians – even if it partly reflects the currency’s strength – but it may have a dark side too. Fast growth in the highest denomination notes, especially the €500 note, has raised suspicions that they are popular among criminals, although the ECB plays down this factor.

By the end of October the $759bn-worth of US dollar notes in circulation was only a fraction ahead of the value of euro notes, converted at exchange rates at that time.

But since October the euro has risen strongly against the dollar and this month the value of euro notes has risen to more than €610bn, or in excess of $800bn at the latest exchange rates.

Coupled with a falling US Dollar, this doesn't suprise me. And I don't want to hear any skreeds about the end times with this, because there are 13 nations directly supporting the Euro.
Still, the strength of the two currencies could easily reverse themselves in a few years, we'll just have to watch and see, and in my case learn, because this is a field I'm unfamilar with.

1 comment:

Anonymous said...

Armageddon is around the corner, the Euro, the Mideast crisis, and Ahmadinejad is the 666. I'm gonna build an underground shelter to hide, well, not until I've written a book about the end is near:o)