End of the reign of the dollar? The euro has a historic card to play

Europe has seen thunderstorms, crises, doubts. But rarely such a large shooting window has not opened. Since the United States of Donald Trump have been playing geopolitical roulette with customs prices and have been on economic provocations, a flaw is emerging in King Dollar's armor. And in this breach, the euro, often mocked for its hesitations, could well invite itself to the table of major global currencies. Better yet, it could soon be imposed on it.

The dollar weakens, the euro muscle

Since the inauguration of Donald Trump, The dollar no longer shines as much. In April, theDoxy index – which measures the strength of the greenback in the face of major currencies – has fallen by 10 %. A real slide, fueled by the political whims of the White House and public criticism against the Federal Reserve.

Europe, thanks to its stability and investments, will benefit from the drop in the dollar.

Thierry Laborde from BNP Paribas.

This disenchantment for the dollar Pushes investors to review their cards. And guess who is about to take out your AS? The euro. The single currency has never really been able to take advantage of its massive economic potential. But today, The cards are rebatted. If Europe seizes the moment, She can impose her currency as a global monetary pillar.

Certainly, everything has not yet been played. The euro still lacks a “” Safe Asset »»an active refuge equivalent to American treasury bills. This monetary grail, used as a universal collateral, sorely lacking in the old continent. However, the bases are there: a European Central Bank solid, a banking sector of $ 34,000 billion40 % more massive than that of the United States. It's not nothing.

The dream of an active European refuge: mirage or turn?

The challenge is there: can the euro become a reserve currency without an asset refuge worthy of the name? So far, Attempts have aborted : the “Stability Bonds” of 2011, the “esbies” of 2018, or even the Nextgenerationeu post-Cavid program – All have suffered from the lack of political consensus. The idea of ​​a shared debt in the euro zone remains taboo for several capitals.

But times change. Under pressure from an unpredictable America, some dogmas vacillate. L'Germany herself, a long cantor of budgetary orthodoxy, crossed a Rubicon by launching a massive defense and infrastructure plan funded by debt. What if it was only the beginning?

As the Institute of Liberties recalled:

There have been many dollars to sell than euros to buy. […] And that's why your daughter is silent, said Molière.

Clearly, the flows are reversed. The euro rises, the dollar doubts, Bitcoin perseveres and the public, formerly skeptical, begins to believe in the potential of a strong European currency, backed by a more integrated economic policy.

Speculations are righteous. For the euro to win, it will take a shock. What if this shock came not from finance, but from politics? As in 2020 with the COVVID, A crisis can sometimes move the lines faster than a European summit. Maybe Trump, weakening the dollar, will involuntarily do a proud money service he loves to hate.

Capital, confidence and competitiveness: the signals go green

Confidence is contagious, especially when it touches the wallets. While Wall Street has recorded its worst sessions for two years, the euro has benefited. Not only does money are climbing, but capital follows. The Grand Funds repatriated their assets in America to reinject them on European soil.

It is An inverted domino game : the imbalance on one side gives breath to the other.

The consequence? A euro that flirts with the summits, a gold that shines like never before, and an oil that climbs, stimulated by the (illusory?) Hopes of Sino-American commercial truce. Even European bonds find colors. The yield of the German bunds goes up Dégément, proof of a renewed interest in the sovereign debts of the block.

And in this great stirring, a question comes back constantly: can the euro take over from the dollar? For derivativesprofr, the time may have come:

Global markets […] seem to have found a new balance.

An equation that appeals to investors looking for stability. And when the word “Stability” rhymes with “Europe”is that something has changed.

Also on the stock market, the signs are not mistaken. With each Wall Street crisis, Europe has sometimes managed to do well. This was the case in 2001, in 2008 to a lesser extent, and today history could stutter. The last fall of the Nasdaq, combined with the re -evaluation of the euro more than 11 % against the dollar, shows that the financial tectonic plates move. So yes, the euro is not yet the king. But in this theater of the world economy, he could well win a first role. And this time, without lining.