The Euro fell more than 1.2% in value against the US Dollar following the announcement by the Federal Reserve of its latest rate cut. The Euro’s price against the US Dollar right now brings back memories of September 2022 when gas prices were hitting record highs and the Euro fell even below US Dollar parity.
The Euro’s weakness under a renewed Trump administration in the United States is not new, but global US Dollar use has also been increasing gradually along the years, with the US Dollar replacing the Euro in some international areas. According to recent research by Gavekal Research, since late 2022, the US Dollar has been significantly replacing the Euro in international SWIFT payments. Total global US Dollar payments increased further in 2024 making up of 49.1% of the total global payments with the increase mainly attribute to the US Dollar replacing the Euro. Total US Dollar payments are recorded as the highest they have been since 2012.
US Dollar foreign exchange reserves take up about 54% of the global reserves, with the Euro still coming in second taking up around 18%.
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