Can the euro fall the US dollar as a backup currency in the world?

The definition system in US President Donald Trump has sparked Volatility in American assets European officials do not hide the desire to seize the euro He hesitates in confidence in the US dollar.

the dollar It is the most common backup in the world, and it represents Almost 60 % One of the world’s foreign currency reserves and an important role in the asset trade, such as oil and gold. It is also a link to currencies, including Hong Kong Dollar And the Saudi riyal.

In second place, late behind Greenback, it is euroWhich constitute about 20 % of the international FX reserves.

The dollar index – which measures greenery against a basket of major competitors – has decreased by more than 8 % since the beginning of the year. This week, Christine Lagarde, President of the European Central Bank, said that the changing geopolitical scene that was leading these moves gave European politicians an opportunity to raise the position of the euro.

“The multilateral cooperation is replaced by zero thinking and the plays of bilateral power,” she said on Monday in a letter at the Herti School in Berlin. “There is even uncertainty about the cornerstone of the system: the dominant role of the US dollar.”

She said this could “open the door to the euro to play a greater international role.”

Lagarde indicated in her speech, with the closure that GAP “is” out of the content “, while noting that the European currency can” gain “a greater global influence with the right policy mix.

She said: “First, Europe must ensure that it has a strong and credible geopolitical institution by maintaining a fixed commitment to opening trade and supporting security capabilities.”

“Second, we must strengthen our economic institution to make Europe a great destination for global capital, enabling it by the deeper and most liquid capital markets. Third, we must enhance our legal basis by defending the rule of law – and political unification so that we can resist external pressure.”

Lagarde added that the euro, with the status of the high reserve currency, would bring a large number of benefits to Europe, including low borrowing costs for regional governments, dismissal from exchange rates and protecting Europe from sanctions “or other forced measures.”

“In short, Europe will allow better control of its fate,” Lagarde added.

It is not the only European Central Bank that promotes the capabilities of the euro, as a trust in the United States. Last week, Isabelle Shenabel, a member of the Central Bank Executive Council, He said The euro area can become a safe haven with the continued definition policies in Trump – while giving the region a “historical opportunity to enhance the international role of the euro.”

Market monitors who spoke to CNBC have been divided into the euro capabilities to seize some of the dollar’s share of global property FX.

George Buckly, the European chief economist in Nomura, who appeared on “the first edition of Europe” on Friday, said he could see upside down to the euro, as investors are looking to diversify away from Greenback.

When asked whether he agreed with a evaluation of the currency capabilities, Bakli replied: “Certainly to some extent.”

“The dollar is still the largest backup in the world … the euro is still far away, but it is gaining great momentum with all the things that happen in the United States,” he said. “I think, certainly there will be a lot of attention.”

Bakli said he was seeing suggestions as in the current environment, investors might want to allocate their money to other than the dollar.

“If they are thinking about switching about the dollar, the euro is a clear option,” CNBC told CNBC. “It is a huge commercial bloc, and the euro is clearly benefiting from this. We believe that the euro may rise to about $ 1.20 by the end of the year.”

The euro was traveling about $ 1.13 on Friday morning. Since the beginning of the year, the currency has gained more than 9 % against the US dollar – the transition to $ 1.20 would represent an additional leap of about 6 % of the current prices.

While Buckley was optimistic about expectations for the euro, Aaron Hill, the chief market analyst at FP Markets, told CNBC that the dominance of the dollar was “still enormous.”

He said, “The euro, despite its support for the great economic weight of the European Union, is facing great obstacles,” he said. “Political fragmentation through member states and relying on American security frameworks limits its global influence.”

Hill added that the euro restrictions are unlikely to evaporate any time soon.

He told CNBC: “While the high American debt and the conversion of global alliances call for scrutiny, the euro lacks cohesion and reaching a challenge of the dollar’s superiority in the short term,” CNBC told CNBC. “At the present time, the Greenback era bears, not similar.”

On Tuesday, John Plassard, the chief investment specialist in the Mirabod Group, told CNBC, with the US dollar continuing about 60 % of global foreign exchange reserves, there was no “competition for the US dollar” at the present time.