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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (21057)	1/11/2005 3:03:33 PM
From: RealMuLan	Read Replies (2) \| Respond to of 116555

Yeah, that is the US plan, to unite EU to fight China on RMB revalue. My guess? won't work<ggg>

To: gregor_us who wrote (21057)	1/11/2005 3:06:09 PM
From: RealMuLan	Respond to of 116555

ECB: "Review of the international role of the euro" The single currency is increasingly being used for international trade and as an "anchor" currency The European Central bank has published its report entitled "Review of the international role of the euro" which examines the use of the Euro throughout the world in the period from mid 2003 to mid 2004. The report aims to gauge the role played by the Euro outside of the Euro area with a close look at the role of the Euro in bond issuance throughout the world. International debt markets The Euro has been in fully active for five years and the amount of debt securities denominated in euro account for about 31% of the total number of international issues. Geographically speaking the majority of these issues are from Euro zone countries themselves or from neighbouring countries just outside the zone. Eurozone neighbours have been responsible for the largest rise in the use of the Euro. Further a field in Asia, Latin America and the Middle East, the situation remains stable and unchanged as only a small fraction of their international bonds are denominated in euro. International loan markets and deposits As with debt markets, the use of the Euro in international lending and deposit-taking is predominantly by Eurozone countries and their neighbours and "mature" economies. The report reads: "Close to 45% of the non-euro area non-banks borrowing in euro from euro area banks reside in the United Kingdom. Similarly, UK residents account for almost 40% of the euro-denominated deposits of noneuro area non-banks in banks in the euro area. When borrowing from banks outside the euro area, non-bank residents of the euro area largely borrow in euro, which accounts for around 61% of such borrowing. Deposits from euro area residents held in banks outside the euro area are also largely denominated in euro." However, the amount of cross-border lending and deposit activity between non euro zone member states is limited to a mere 5% or 6% in the case of both loans and deposits. Foreign Exchange markets In the 2003/2004 period the euro was the second most actively traded currency on foreign exchange markets worldwide. The single currency accounted for 37% of foreign exchange transactions, nearly the same as in 2001. The Euro tends to be traded against the US dollar as is seen by the fact that 76% of the total worldwide foreign exchange activity involving the euro was with the US currency. International bond issuance by firms The Euro is flexing its muscles somewhat as a financing currency in international bond markets. The ECB set up a specific research project to determine the rate of the single bond issue level for the period from 1999 to 2003 and more importantly to determine what actually motivates the currency denomination of a bond by corporations in developed economies. The role of the Euro The report finds that the role of the euro in international capital and foreign exchange markets as well as an international financing currency anchor and reserve currency has remained largely stable. Nevertheless, there have been indications that the euro is increasingly being used as an international invoicing currency. The overall view of the single currency is that it has remained remarkably stable since its inception and that its realm of use is very geographically limited to Eurozone member states and their neighbours. 11 January 2005 europe.tiscali.co.uk