Key Points
- The U.S. dollar’s share of global currency reserves dipped slightly in the first quarter of 2025.
- The euro’s share of reserves increased to its highest level since late 2022.
- The dollar has been volatile this year due to the Trump administration’s aggressive trade policies.
- The data have fueled debate about the long-term dominance of the U.S. dollar.
The U.S. dollar’s share of global currency reserves dipped slightly in the first quarter of 2025, while the euro’s share saw a modest increase. The new data from the International Monetary Fund (IMF) comes amid growing debate over the dollar’s long-term dominance.
According to the IMF, the dollar’s share of reported reserves fell to 57.7% from 57.8% at the end of last year. At the same time, the euro’s share rose from 19.8% to 20.1%, its highest level since late 2022.
The foreign currency markets have been volatile this year. The dollar lost nearly 4% in the first quarter and dropped another 7% in the second quarter. This decline has been driven by major policy shifts from the Trump administration, particularly its aggressive moves on trade, which have shaken market confidence in the greenback.
These events have fueled speculation about whether the U.S. dollar is at risk of losing its status as the world’s go-to reserve currency. While some analysts see early signs of “de-dollarization,” most agree that any major shift away from the dollar would happen very slowly.
In terms of actual dollar amounts, the value of U.S. dollar reserves did rise in the first quarter. However, the growth in euro reserves was even stronger, outpacing the dollar’s gains.
