Investors started «exodus from euro», while the world's central banks slowed down purchases of the European currency. Fears are raised by how Greece's financial troubles, and expectations, that the growth rate in the region will be slower, than in the USA and Japan. All of this jeopardizes the euro's status as a reserve currency.
1 February. Investors withdraw funds from assets, номинированных в евро, at a record fast pace, since the world's central banks have slowed down euro purchases, jeopardizing its status as the world's second reserve currency after the US dollar, reported by Bloomberg.
Last year, world central banks actively bought euros, and many analysts – from Barclays in London to Alletti Gestielel in Milan – прогнозировали, that central banks are realizing their long-standing threat and will cut back on the dollar, thus putting an end to his world domination.
However, since 25 november 2009 of the year the euro fell by 8,4%, showing the fastest drop in value for 10 Months, out of fear, that the debt-ridden eurozone countries, primarily Greece, will not be able to fulfill their debt obligations.
Миллиардер Джордж Soros заявил на экономическом форуме в Давосе, what in the world «there is no attractive alternative to the dollar yet».
Already 19 for weeks in a row, global traders refuse to invest in European stocks in favor of the rest of the world markets. The net outflow of funds from European stock markets during this period amounted to $13 billion, what «clearly does not benefit the single European currency», says Jeffrey Yu, currency analyst at UBS AG in London. According to him, global investors have returned to «медвежьему» view of the euro, which prevailed at the height of the financial crisis in 2008 year.
«Euro may fall further. Government bond risks remain the main topic in the market. Concern, related to the budgetary situation in Greece, unlikely to disperse in the near future», – noted economist at VTB Capital in London, former British Treasury official Neil McKinnon. In his opinion, the euro against the dollar may drop to $1,20, but the analyst didn't say, when exactly will it happen.
Beyond fears, that eurozone countries will have to pay Greece's debts, fears are also strong, that growth in the region will be slower, than in the USA and Japan, and the debt burden will exceed the pre-crisis level for at least another five years.
«Greece is a catalyst, but the root of the problem lies in the very structure of the euro, – sure the head of the foreign exchange division of Fischer Francis Trees & Watts Adnan Acant. – The pace of economic recovery in the United States and Asia will outstrip European. This is reason enough, so as not to bet on the euro».
Dow Jones Euro Stoxx Stock Index of Europe's Leading Companies 50 is among the indicators with the worst results from the beginning 2010 of the year. In dollar terms, he lost 9,4%, what in 2,5 times the drop in Standard & Poor‘s 500.
As expected, Eurozone GDP will grow this year by 1,2% compared to the rise of the economy by 2,7% in the USA and on 1,35% in Japan.
Professor of Economics at New York University Nouriel Roubini noted at the forum in Davos, that the budgetary problems of a number of eurozone states, including Greece and Portugal, create growing risks for the economy.
«In the end, not this year and not in two years, we may face the collapse of the monetary union», – the economist believes.
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