ECB sees euro becoming alternative to dollar as reserve currency

European Central Bank (ECB) President Christine Lagarde attributes the recent euro appreciation against the dollar to Donald Trump's unstable policies. Additionally, she sees an opportunity for the bloc’s currency to increase its international role. 

According to Lagarde, some segments of the financial markets have lost confidence in US assets, as uncertainty persists. Meanwhile, Europe is seen as a stable economic area with an independent central bank and a sound currency. The ECB president also separately highlights progress in launching the single capital market and the digital euro. 

Besides, Christine Lagarde expects EU investment and consumption to pick up, even if the uncertainties stemming from the US administration’s announcements have a negative impact on investor confidence and slow the region’s economic recovery.

ECB Vice President Luis de Guindos says the euro could become a reserve currency instead of the US dollar if efforts to integrate it increase. Isabel Schnabel, a member of the central bank’s executive board, also emphasizes the opportunity to strengthen the euro's role as an international currency.