Publications

This presentation analyzes forecasts and recent developments related to the global economy, as well as other issues such as geopolitics, the US dollar and the new global financial architecture, defense in Europe, and GenAI, employment, and productivity.

A global reserve currency is not just a symbol of power: it is the functional backbone of the international financial system. It is used to set prices, settle transactions, issue debt and, above all, provide liquidity. So what would happen if it didn’t exist?

The dollar's recent fall has reignited the debate about the possible end of its hegemony in the global financial architecture. A question that has once again fed an old European desire: for the euro to consolidate its position as a reserve currency and safe haven.

In the final quarter of 2024, Donald Trump’s return to power in the United States had a negative impact on the euro. Aggressive protectionist policies and increased fiscal stimulus in the country were expected to push the dollar higher.

The first half of 2024 has been a period of high volatility in the foreign exchange markets, with various changing factors significantly influencing behavior. Ultimately, since the beginning of the year, there have been moderate depreciations in emerging currencies and, to a lesser extent, in the euro against the dollar.

Since mid-July, the euro has depreciated by more than 5% against the dollar, even dropping to USD 1.04 at the beginning of the month. This drop is the result of a combination of circumstances that have had a significant impact on the currency in the second half of 2023 after a solid second quarter.

Over the past six months, the euro has experienced a significant appreciation against the dollar, from lows below parity last fall to levels of around 1.10 in recent weeks. This somewhat expected appreciation has come sooner than anticipated.