Dollar cedes ground to euro in global reserves, IMF data shows
Shares of global currency reserves held in the greenback stood at 57.8% at the end of 2024, while the share of euros gained from 19.8% to 20.1% - their highest since late 2022, according to the IMF's Currency Composition of Official Foreign Exchange Reserves (COFER) data released on Wednesday.
Foreign currency markets have seen some dramatic swings since the start of the year.
The dollar lost nearly 4% in the first quarter of the year as some big policy swings from the administration under U.S. President Donald Trump, especially on trade, security and the economy, roiled market confidence in the world's foremost reserve currency.
The decline accelerated dramatically in the second quarter, when the dollar dropped more than 7% in the wake of Trump's introduction of sweeping tariffs on "Liberation Day" in early April - though some of those measures have been put on hold.
While currency swings do not equate to reserve managers' willingness to hold them, the latest events have fuelled a debate on whether the U.S. dollar could be in danger of losing its status as the world's reserve currency of choice and the center point of the global monetary system. While some point to nascent signs of de-dollarisation, there is broad agreement that any such shift would be very slow.
Looking at levels in claims, U.S. dollar claims did rise 1.4% quarter-on-quarter to $6.72 trillion, though that gain was outpaced by the euro's 2.6% rise to claims of $2.3 trillion, IMF data showed.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
27 minutes ago
- Reuters
Crypto exchange Bullish's shares set to more than double in debut
Aug 13 (Reuters) - Bullish's (BLSH.N), opens new tab shares were indicated to open at more than double their initial public offering price on Wednesday, signaling growing investor confidence in the sector and boosting prospects for future U.S. listings by other digital asset firms. If the Peter Thiel-backed crypto exchange starts to trade at the last indicated range of $85 to $88 on the NYSE, it could potentially value the company at more than $12.86 billion. The parent of crypto news website CoinDesk raised $1.11 billion in an IPO priced at $37 apiece, valuing it at $5.4 billion, as mainstream crypto adoption accelerates in a sector that recently surpassed $4 trillion in value. "Bullish came out with an attractive initial valuation, and investors responded by aggressively bidding it up during the pre-IPO process," said Jeff Zell, senior research analyst at IPO Boutique. A string of regulatory wins under a pro-crypto White House, corporate treasury adoption, and ETF inflows have prompted investors to embrace the once-scorned digital asset class, driving bellwether bitcoin to record highs. Exchange operator Gemini and asset manager Grayscale are also among the crypto firms that have confidentially filed to go public. "We've gone public today, and there's a slew of others that are going to follow us, and I think that is net beneficial, because it gives people more options in terms of how they access this asset class," Bullish President Chris Tyrer told Reuters in an interview. Bullish is close to concluding a two-year process to obtain a virtual currency license known as a "BitLicense" in New York, which would allow the company to operate in the state, Tyrer said. The BitLicense requires companies to comply with requirements related to know-your-customer, anti-money laundering and capital. Bullish plans to convert a significant portion of the IPO proceeds to stablecoins — a slice of the crypto space that has boomed since U.S. President Donald Trump signed the Genius Act, creating a regulatory regime for the dollar-pegged cryptocurrencies. Bullish's debut marks a rare U.S. listing by a crypto exchange, joining larger retail-focused rival Coinbase (COIN.O), opens new tab, which became the first crypto player to be included in the benchmark S&P 500 (.SPX), opens new tab index in May. Founded in 2020, Bullish targets institutional clients, whose crypto holdings are expected to rise as a new White House order aims to allow alternative investments in 401(k) retirement plans. "A pure institutional strategy positions Bullish for more stable, recurring revenue than exchanges reliant on retail volumes, which tend to be cyclical and sentiment-driven," said Michael Hall, co-chief investment officer and founding partner at Nickel Digital Asset Management. Bullish CEO Tom Farley was previously the president of NYSE. "For a sector still overcoming reputational headwinds, that kind of leadership experience can be a differentiator in securing institutional mandates," Hall said.
Reuters
28 minutes ago
- Reuters
FTSE 100 ekes out gains amid global rally on US rate cut optimism
Aug 13 (Reuters) - Britain's FTSE 100 closed higher on Wednesday, reaching a one-week peak, as expectations of a U.S. Federal Reserve interest rate cut buoyed demand for risk assets globally. The blue-chip index (.FTSE), opens new tab finished 0.2% higher, marking its third consecutive day of gains, while the domestically focused midcap FTSE 250 index (.FTMC), opens new tab ended little changed. European bourses outperformed the FTSE 100 as losses in energy and financial stocks weighed on the London's benchmark. Global equities rallied following Tuesday's U.S. inflation data, which aligned with expectations and strengthened confidence in a September rate cut by the Fed, propelling Wall Street to record highs. This positive sentiment also lifted British markets, with healthcare stocks (.FTNMX201030), opens new tab leading gains, up 2.7%. Contrasting with U.S. optimism, British labour data on Tuesday revealed weak hiring alongside persistent wage growth - complicating the Bank of England's balancing act between economic slowdown and stubborn inflation. Markets now anticipate a delayed BoE rate cut in November. Next on the market's radar will be Thursday's gross domestic product data, which economists expect to show the British economy expanded by 0.1% in the three months to June. Investors' focus will also be on Friday's high-stakes talks between U.S. President Donald Trump and Russian President Vladimir Putin regarding a potential deal to end the conflict in Ukraine. A gauge of Britain's energy companies (.FTNMX601010), opens new tab declined 0.6% as oil prices fell more than 1% in the day, though losses were limited after U.S. Treasury Secretary Scott Bessent indicated sanctions against Russia or secondary tariffs could increase if Friday's meeting disappoints. Meanwhile, financials weakened with the non-life insurers index (.FTNMX303020), opens new tab falling 3.5%. Beazley (BEZG.L), opens new tab tumbled 12.3% in its worst one-day decline in nearly five years, after it lowered its annual premium growth forecast, partly hurt by subdued demand for its cyber and property risk insurance. Among other movers, infrastructure products maker Hill & Smith (HILS.L), opens new tab topped the gains on the midcap index, rising 10.2%, after its half-yearly results and announcement of a share buyback programme.
Reuters
28 minutes ago
- Reuters
New York sues Zelle, says security lapses led to $1 billion consumer fraud losses
NEW YORK, Aug 13 (Reuters) - Zelle was sued on Wednesday by New York Attorney General Letitia James, who said the electronic payment platform's refusal to adopt critical safety features enabled fraudsters to steal more than $1 billion from consumers. The lawsuit in a New York state court in Manhattan followed the U.S. Consumer Financial Protection Bureau's decision in March to drop a similar case. That agency has ended most enforcement activity following U.S. President Donald Trump's return to the White House. Zelle was launched in 2017, and competes with apps such as PayPal's (PYPL.O), opens new tab Venmo and Block's (XYZ.N), opens new tab Cash App. Its parent, Early Warning Services, is owned by seven large U.S. banks: Bank of America (BAC.N), opens new tab, Capital One (COF.N), opens new tab, JPMorgan Chase (JPM.N), opens new tab, PNC (PNC.N), opens new tab, Truist (TFC.N), opens new tab, US Bank (USB.N), opens new tab and Wells Fargo (WFC.N), opens new tab. James said Zelle's parent and the banks knew for years that the platform was vulnerable to fraudsters but resisted basic safeguards, with the banks sometimes ignoring customer complaints while Zelle let fraudsters stay on the platform. The result was "rampant" fraud that Zelle sometimes refused to address even after it occurred, despite its assurances it was a safe alternative to cash and checks and "backed by the banks, so you know it's secure," the complaint said. In a statement, Zelle said more than 99.95% of transactions on its platform are completed without reported fraud, leading the industry. "This lawsuit is a political stunt to generate press, not progress," Zelle said. "The Attorney General should focus on the hard facts, stopping criminal activity and adherence to the law, not overreach and meritless claims.' Early Warning Services is based in Scottsdale, Arizona. The seven banks were not named as defendants. James said typical scams involved hacking into users' accounts and making unauthorized transfers, convincing users to send money for nonexistent goods and services, and impersonating banks, government offices and utilities. According to the complaint, one victim was told his electricity would be shut off unless he paid Con Edison $1,477 via Zelle, to an account named "Coned Billing." Another victim said Chase and Zelle wouldn't help him after he sent $2,600 in two installments via Zelle to buy a puppy, and realized he had been scammed when the purported seller demanded more money. James said it wasn't until 2023, after the CFPB and several members of Congress began probes, that Zelle adopted "basic" safeguards it had proposed four years earlier. While reported fraud losses plummeted, the safeguards were "too little too late" for consumers who had lost money, and despite those safeguards Zelle still facilitates "substantial fraudulent activity," the complaint said. "No one should be left to fend for themselves after falling victim to a scam," James said in a statement. The lawsuit seeks to require Zelle to beef up anti-fraud protections, and pay restitution and damages to defrauded New Yorkers. James sued Capital One in May for allegedly cheating savings depositors out of millions of dollars in interest, and in June settled claims against MoneyGram over remittance transfer lapses. The CFPB abandoned similar cases earlier in the year.
