(5 May 2025 – Europe) The Euro’s fastest rally in two decades is being backed up by options trades that point to the start of a structural shift for Europe’s common currency.
The Euro has already appreciated nine percent in 2025 according to Bloomberg, the most since 2003. While momentum has stalled this month. a rare signal in the options market adds weight to the view that the move is not merely tactical and is the commencement of a longer term trend. ING reports in a new report Unipolar disorder: How the euro can benefit from dollar disillusionment that recent financial market volatility has reignited debate over the dollar’s status as the world’s preeminent reserve currency.
“The transition to a new multipolar world will be a long process, but de-dollarisation in FX reserves of US$11.5 trillion continued in 2024. What was new was that the euro was the key beneficiary last year. Should central banks’ appetite for Euros return to what it was in the early 2000s, Euro-denominated FX reserves could increase by as much as around EUR450 billion” commented ING Global Head of Markets and Regional Head of Research, UK & CEE, Chris Turner.