August 6, 2014

A lot of nonsense has been written over the past several years, and continues to be written, about a general shift away from the US$ towards alternatives such as the euro and the Yuan. For record purposes, here are some facts:

1) Shares of global trade settlement, according to SWIFT (Society for Worldwide Interbank Financial Telecommunication):
- In June-2014 the US dollar’s share was 40.2%, which is UP from 29.7% in January-2012
- In June-2014 the euro’s share was 31.3%, which is DOWN from 44% in January-2012
- In June-2014 the Yuan’s share was 1.5%, which is UP from 0.3% in January-2012

2) Shares of global FX turnover, according to the BIS:
- In 2013 the US dollar’s share was 87.1%, which is UP from 84.9% in 2010
- In 2013 the euro’s share was 33%, which is DOWN from 39% in 2010
- In 2013 the Yuan’s share was 2.2%, which is UP from 0.9% in 2010

So, the US$ has gained in popularity over the past few years as an international medium of exchange for use in both trade and investing. The Yuan has also gained in popularity, but none of its gain has come at the expense of the US$ and its share of global trade and capital flows remains trivial. The euro has been the big loser.

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