The weakness of the US dollar creates an option for the euro. Can last? star-news.press/wp

President Trump has sent shades of the global trading system from a long time point of view, the United States is the source of the safe assets in the world. That is He created the opportunity for Europe.

Last week US dollars and US treasure bonds sold the market tumult at the same time. Jerome H. Powell and the Secretary of Finance tried Scott Bessent, they tried to squeeze the commercial offers.

But many European officials who attend the spring meeting of Washington’s international moners were skeptical that the uncertainty of Mr Trump’s trade policy was soon. They said the trump administration policy approach will not be easily forgotten. Instead, they saw the potential to attract investors to European assets, from the euro to the bono market.

“We see the stability, forecast and respect for the rule of law,” Valdis Dombrovskis discussed the banks of the Kept’s Block economy on Wednesday, on the edges of IMF. “We already have a more interest in investors in the designated Euros assets.”

The widest indication that funds flow into Europe: from the beginning of April, the euro won 5.4 percent against the dollar, 2021. Highest levels over the year.

The question between politicians and investors is that the last wintering made in the eurozone is only reducing short-term portfolios for the sake of the dollar and long-term trend.

Confused past

“There is a great excitement about Europe,” said the Economist of the Massachusetts Institute in an interview.

He said the excitement of the euro in 1999 that he reminded that the currency was created, representing the dollar by some economists and policies. In the early years, he exceeded the combined currencies replaced by international usage of euro.

But then the euro struck for crises. Despite a dozen monetary unity, including Germany, despite the largest economy in Europe, the region was politically divided, he turned confidence in currency. In 2012 the sovereign crisis of the debt, and then it was a decade of low interest rates, offered low returns in the region’s bonds.

The euro is used by 20 countries and represents about 20% of foreign foreign banking reserves, an image that was barely made in the last two decades. The percentage of global exports are billed in thirty euros, and more than half are in dollars.

The speculation about new dominant currencies should be taken “carefully”, Mrs. Forbes said, but there is more time behind the euro.

“This believes that he has more legs, because Europe is stronger and much more unified,” he said. “At the same time, more problems arise with US dollar assets.”

Before the improvements of some of the issues they deviated foreign investors have been made. Today, the European bonds are making better returns and investors trust that the European Central Bank will be the last resort lenders, minimizing the risk of economic problems in a country.

Safer assets

For investors, the most important new development is Germany for more government debts for about 1 trillion euros, known as Bund and due to the safest assets named Euro.

It has been stopped the supply created by the strict German conservatism for years. In the last month, Parliament changed borrower limits anchored in its Constitution, so that the so-called debt brake, to invest in military governments and infrastructure to borrow hundreds of million euros.

“There are joy in Europe” due to the German fiscal stimuli, said crystalline Georgieva, Director General of FMI. “And it adds something that isn’t tangible, but it’s important – trust.”

The request of German debt has had additional issues. Finally during the market, Bund prices rose, pushing the profits down, the net sign of investors interests. At the same time, the US government bonds moved in the other direction. At the end of last week, the performance of 10-year soronaos was 2.47 per cent, to reverse almost all the increase in the stimulus announcement.

Investors also expect to add debt to the European governments, the idea proposed to finance more military expenses during Bloc. Economists indicate that this happened: The European Union spent more than 600 million euros with bonds to finance pandemic recovery programs. But in front of the hard opposition the lender and future issuance would also fight to protect all Member States.

There were also confusion and frustration with Mr. Trump’s commercial policies, including some European officials, including central bankers, Europe had to take advantage of this moment.

“It will be the time of creativity and pragmatism, achieving moving things,” Olli Rehn, the governor of the Finnish Central bank said in a conference. “I hope a lot is a positive challenge for this period. Because we are very serious for consolidating common defenses in Europe. This requires secure assets.”

‘Long and hard road’

Optimism is growing about the role of the euro. Klaas Knot, the governor of the Central Bank of the Netherlands said Agnostic was an international use of the euro for a “wise believer.”

But the “external force” of the euro has added “Island of internal strength in Europe,” and the governments must move forward to increase this strength, talking on the edges of the meetings in Washington.

Officials Bloc must continue to delve deeper into a single market that connects 448 million people and freely negotiate and do business, Knot said. Legislators also said to build a single capital market, money would be easier to cross European limits. “We still have some work in Europe.”

Alfred Kramer, director of the European Department of IMF, made the last time against the euro in favor of “excessive interpretation”. “Go to the European EXEMPT,” he said, “It’s still a long way and hard”.

The region, he said, needed some structural changes that would allow the company that would allow a more dynamic business sector to have larger markets and pools.

Many officials said that Euro investors would be one of several active as they are more pronounced as they reduce their farms in dollars. In recent weeks, gold prices rose, exceeding $ 3,300 Troy ounces, and Swiss Franc also passed by almost 7% of the dollar this month.

“I don’t have everyone to move masively dollars and suddenly change the euro; I think it’s a healthy diversification,” Forbes said. But foreign private foreign investors want to build many US debt farms and see the decline of the dollar.

“Europe,” he added, “it is a natural place to diversify.”

Melissa Eddy He has made Berlin reports.