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Why hasn't Euro become the default global reserve currency yet? (lemmy.zip)

submitted 5 days ago by CmdrGraves@lemmy.zip to c/asklemmy@lemmy.ml

19 comments fedilink hide all child comments

I know that Euro is the second most traded currency but it doesn't have the #1 spot because of the US Dollar (which is printed on top of piling debt by the way) since oil is priced in USD per barrel instead of quoting it in EUR per barrel (since the US has monopoly on oil).

Money printers for the USD are running constantly, going "BRRR" and have a high national debt. They're putting themselves further into that hole whilst printing more cash. What about the Euro? Is it even printed that often 24/7 or controlled to print a capped amount?

The only way to really Euro become superior is to incentivize it on a international scale (more than the US Dollar) on getting countries to accept & trust it more (but USD accounts for 60% of global commerce) so the Euro has A LOT of catching up to do on that.

Does the EU really have power or control over OPEC (Oil)? If they can grasp monopoly over the Gulf states by convincing them to price every barrel in Euros: would that strengthen the currency? The British Pound is the former global reserve currency before the US Dollar.

If European travelers stopped converting EUR to USD, only using EUR for international travel towards currency exchanges: would that increase the demand for it since US Dollar is literally the default for A LOT of countries (even "third world" ones) in terms of payment.

Arbitrary numbers regarding forex aren't an indicator: so what if 1€ is worth more than $1? It's more on PPP and trust, so with a stronger Euro traveling abroad (including the Americas): does that make it cheap for you to visit as you're able to buy more than they can?

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[–] HobbitFoot@thelemmy.club 7 points 4 days ago

Only one oil country switched to Euros and an invasion switched it back to dollars.

A lot of the international banking structure was built on American systems of banking, so the dollar got baked into a lot.

Until Trump, the dollar was generally seen as more stable given its longevity and being the currency of the largest superpower.

Also, compared to the Euro and Yuan, the American dollar has an internal hedge when it comes to energy prices given that the USA can supply most of its energy needs by itself. It is hard to handle an oil shock when the currency's value drops because the internal market can't afford oil.