Are We Entering the Euro’s Golden Age? A Currency Shake-Up in Motion…

Australia’s business community is closely watching a potential seismic shift in the global currency landscape as the euro gains momentum against the US dollar, signalling a new era in international trade and finance. Nigel Green, CEO of global financial advisory firm deVere Group, recently described this moment as the “euro’s golden era,” noting the currency’s unprecedented opportunity to close the gap with the dollar.

For decades, the US dollar has been the world’s dominant reserve currency, underpinning global trade and finance. However, this dominance is now being questioned amid rising trade protectionism, geopolitical tensions, and an increasing global appetite for monetary diversification.

“Today, the euro accounts for 20% of global foreign exchange reserves and nearly 40% of global trade invoicing,” Green said. “This is telling — it’s not just Europe using the euro. It’s the world voting with its capital.”

The eurozone’s strengthened political unity and its push towards joint investments in defence, green technology, and digital infrastructure further solidify the euro’s standing. These moves, Green suggests, could boost the supply of safe euro-denominated assets — a key factor for institutional investors and central banks.

What does this mean for Australia?

Australia’s economy, heavily reliant on trade, is already deeply interconnected with the European Union. The EU is Australia’s second-largest trading partner after China, with two-way trade valued at approximately €160 billion ($260 billion AUD) in 2023¹. A stronger euro could influence the pricing and invoicing of Australian exports and imports, particularly in sectors such as wine, education, pharmaceuticals, and manufacturing.

Moreover, increased euro usage in global finance could impact the Australian dollar’s stability and investment flows. As central banks diversify their reserves away from the US dollar and toward the euro, the Australian dollar (AUD) may face increased volatility, necessitating greater risk management for Australian businesses engaged in international markets.

Financial analyst Dr. Claire Rogers from the University of Sydney explains: “For Australian exporters and importers, currency volatility means hedging strategies will become more important. At the same time, opportunities may arise from greater euro liquidity and euro-based investment products.”

The rise of a multipolar currency system — with the US dollar, euro, Chinese yuan, and others sharing prominence — also means Australian investors and businesses must adopt more sophisticated currency diversification strategies. Nigel Green warns: “This is not about the dollar collapsing. It’s about a more competitive, more plural currency system. Investors must position accordingly.”

Australian businesses would do well to monitor these shifts and consult financial experts to adapt to the evolving currency environment. The euro’s growing geopolitical and economic clout signals a new chapter in global finance, with Australia set to be an important player.

The post Are We Entering the Euro’s Golden Age? A Currency Shake-Up in Motion… appeared first on Small Business Connections.