Lagarde sees US difficulties as opportunities for Europe and its currency to compete with dollar

The US dollar's status as the world's reserve currency in 2025 is often questioned. Experts are beginning to speculate about its potential replacement by another currency. The main candidate is the euro, which still lags far behind the dollar in terms of its share of total reserve holdings but is well ahead of other competitors to the US currency, except for gold, Reuters reports.

European Central Bank President Christine Lagarde commented on the situation in her speech this week. She said that if the euro were to replace the dollar as the world's reserve currency, the region risks losing part of its currency competitiveness. However, a large influx of capital should more than compensate for this negative effect, Reuters adds.

In her speech, Lagarde clearly identified the United States' challenges as opportunities for Europe. The US economy and currency faced serious obstacles after Donald Trump announced his tariffs on April 2. The president's unpredictable decisions triggered a sell-off of American assets. Lagarde suggested that the balanced policies of European officials could give the European Union a competitive edge.