Euro’s Global Role Is up Slightly, but Still Distant From the US Dollar

Why It Matters

A stronger euro could lower borrowing costs for EU members and challenge the dollar’s privileged status, reshaping global finance and trade settlements.

Key Takeaways

• Euro usage rose to ~20% of global currency share in 2025.
• Euro led global green bond issuance for the first time.
• Daily foreign‑exchange trading of euro declined despite record debt issuance.
• Renminbi use expanded in trade financing amid Middle East tensions.
• Gold reserves fell to 850 tonnes, still second‑largest reserve asset.

Pulse Analysis

The euro’s modest gain to roughly one‑fifth of global currency usage underscores the entrenched advantage of the US dollar, which still commands about two‑thirds of foreign‑exchange reserves. While President Donald Trump’s unpredictable policies have eroded confidence in the greenback, the euro’s incremental progress reflects the European Central Bank’s push to diversify reserve holdings and reduce reliance on the dollar. This shift is especially relevant for multinational corporations and sovereign investors seeking more stable pricing benchmarks.

A notable development is the euro’s record‑setting debt issuance and its emergence as the leading platform for green and sustainable bonds. These trends signal growing investor appetite for environmentally focused financing within the Eurozone, potentially lowering capital costs for green projects. Yet the decline in daily FX trading highlights liquidity concerns, and the ECB’s gold holdings—down to about 850 tonnes—remain the second‑largest reserve asset, illustrating the broader competition among safe‑haven assets.

Looking ahead, ECB President Christine Lagarde’s call for a "global euro moment" hinges on concrete policy actions: completing the savings and investments union, enhancing legal and institutional frameworks, and fostering geopolitical credibility. Simultaneously, China’s renminbi is gaining traction in trade financing, especially amid Middle East tensions, adding another layer of competition. If Europe can deliver a more integrated capital market and credible monetary stance, the euro could capture a larger slice of global finance, pressuring the dollar’s borrowing‑cost advantage and reshaping cross‑border payment dynamics.