In a recent discussion for the Global Disorder Network, Begum Zorlu, ESRC Research Fellow at City St George’s, University of London, talked with Photis Lysandrou, Research Professor at the City Political Economy Research Centre (CITYPERC), about whether the Euro can rival the US dollar and what this means for global disorder.

Donald Trump’s tariffs and disruptive economic policies, according to Photis Lysandrou, served as a wake-up call for Europe. They pushed Eurozone leaders to take more seriously the challenge of strengthening the Euro’s global role. Some economists, such as Kenneth Rogoff, have even argued that he notes Trump helped hasten the dollar’s decline, giving openings to the Euro and the Chinese Renminbi. However, Lysandrou is unconvinced. Trump may have acted as a catalyst, he argues, but that does not mean the dollar faces any imminent rival. “This is not a matter of months or even a few years,” he said. “It will take decades before the Euro can rival the dollar.”

That caution rests on a simple reality: the dollar remains unrivalled in scale, depth, and trust. The Euro’s share of global foreign exchange has slipped in the past decade, while the dollar still accounts for nearly 88 percent of turnover. In securities markets the disparity is even sharper, with the US controlling about 40 percent of global bonds and nearly half of equities.

Repeated predictions of decline have proven wrong. Far from fleeing, foreign investors hold record levels of US securities, including more than $9 trillion in treasuries. As Lysandrou notes, the United States offers something no competitor can match: vast, liquid, and legally secure markets that investors worldwide still regard as the ultimate safe haven.

By contrast, the Eurozone faces a set of enduring obstacles. Without collective Eurozone debt instruments, there are too few safe Euro assets to underpin the currency’s international role. Northern member states remain reluctant to share risks, leaving the bloc in stalemate. European corporations also continue to rely far more on bank loans than bond markets, limiting the growth of large, liquid securities markets. And despite a common currency, the Eurozone lacks a fully integrated banking union or capital market, making cross-border investment cumbersome compared with the seamless American system.

Beyond Europe: BRICS and the Renminbi

Emerging powers are sometimes cited as more serious challengers. After Russia’s invasion of Ukraine, BRICS leaders spoke of reducing reliance on the dollar. Yet here too Lysandrou is sceptical. The Renminbi accounts for only around 4 percent of global currency trading and half of that is against the dollar. Combined, all emerging market currencies make up just 13 percent of the market, compared with the dollar’s commanding position.

The paradox, Lysandrou concludes, is that moments of crisis from financial shocks to pandemics to Trump’s tariffs have not weakened the dollar but reinforced it. Alternatives may grow slowly at the margins, but the structural advantages of the US system, its scale, liquidity, and cohesion mean the dollar’s dominance remains secure for decades to come.