Dollar-Euro Asia Rivalry Expected
SINGAPORE (AP) _ The euro, soon to be the single currency of 11 European countries, will compete well with the U.S. dollar as a major trade and reserve currency, Hong Kong and Shanghai Banking Corp. officials predicted Wednesday.
``I believe that Asian central banks will increase their euro reserves more than the aggregate of all European currencies held by these central banks,″ Mike Stone, head of capital markets sales for HSBC Midland Bank, told a seminar on the planned currency.
About 300 representatives of local corporations, banks and multinational firms attended the seminar to learn about preparing for the Jan. 1 launch of the euro by the European Union.
Stone predicted that the euro would comprise 35 percent of global foreign currency reserve holdings by 2010, compared with 40 percent for the U.S. dollar and 20 percent for the Japanese yen.
He said that in 1995, the combined currencies of all the soon-to-be euro countries comprised only 27 percent of global foreign currency holdings. The German mark alone accounted for 14 percent. In that year, the U.S. dollar comprised 56 percent and the yen 7 percent, he said.