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The mirage of a global euro

It is, with hindsight, a blessing that the currency has fallen short of its potential to be the second global reserve currency. It already has enough challenges on its plate.

The euro has been a success in that it has widespread use outside the single-currency area. Currency in circulation has more than doubled over the last 20 years, both in absolute terms and as a percentage of the eurozone GDP.

The dollar will retain its conventional role as the currency for international trade as long as China limits capital movements to keep control over its domestic economy.

ONE of the great claims made for the euro was that it would rival the US dollar as a second global reserve currency. These hopes have failed to materialise. The euro's importance in global reserves and financial markets today is about the same as it was two decades ago, when it replaced the...

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