Greenspan Says Euro Could Replace Dollar as Reserve Currency
The Associated Press reports that former Fed Chairman Alan Greenpsan has warned that euro could replace the U.S. dollar as the reserve currency of choice.
The euro has been soaring against the U.S. currency in recent weeks, hitting all-time high of $1.3927 last week as the dollar has fallen on turbulent market conditions stemming from the ongoing U.S. subprime crisis. The Fed meets this week and is expected to lower its benchmark interest rate from the current 5.25 percent.
Greenspan said that at the end of 2006, some 25 percent of all currency reserves held by central banks were held in euros, compared to 66 percent for the U.S. dollar.
In terms of being used as a payment for cross-border transactions, the euro is trailing the dollar only slightly with 39 percent to 43 percent.
The U.S. dollar has been falling against the euro, British Pound, Canadian Dollar and other currencies during the Bush administration. A few good resources to find exchange rate data are x-rates.com, Bloomberg and XE.com. If you search Google for Euro you will also receive current information about the value of the euro compared to the U.S. dollar.
