Trump has created a chance for the euro to rival the dollar

IT HAS long been the European Union’s aspiration that the euro would rival the US dollar for global dominance, or at least for monetary sovereignty at home. Now, the self-sabotage of Donald Trump’s Washington is a golden opportunity to realise the dream – if European leaders can overcome their political timidity over doing what it takes to grasp it.

True, as in many areas of economic policy, it is unclear what the Trump administration’s goals are for the greenback. Some of its members think the dollar’s attraction – the “exorbitant privilege” of guaranteed cheap credit from the rest of the world – is in fact an exorbitant burden that, by driving up the currency, depresses American manufacturing. Others, notably Treasury Secretary Scott Bessent, insist the US is committed to a strong dollar policy.

There is also a push to corner the nascent market for cross-border payments via dollar stablecoins, creating another captive source of US Treasury holdings.