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Friday, October 24, 2008

Euro as a Reserved Currency

I'm not a financial expert so curiosity comes in every time financial analysts will start talking about pegging to the dollar and the like, and the question of "how the East Asia is looking at the euro as a reserved currency."

Since the dollar at the moment isn’t in good condition and Asian central banks at some point are looking for other currencies to somehow replace the dollar, this is a good opportunity for the euro to penetrate or dominate in the East Asian market. However, though the dollar is experiencing a decline, it's still the dominant/reference currency. (Winner: dollar)

And don’t you think it's interesting to have an Asian Monetary Fund? But according to them, if Asian governments would decide to create such, they would still decide to pull only dollar reserves, as analysts foresee it. (Winner: dollar)

Well, I guess the conclusion would be that though at the moment euro is "increasing but it's increasing very slowly." So, what do you think of euro's fate in Asia?

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