Can the window period of US dollar volatility become a

**Source:** Caijing Lianhe News  

**Caijing Lianhe News, June 9th**  

As the US dollar enters a volatile window, many European Central Bank (ECB) officials have directly called for seizing the opportunity to enhance the international status of the euro. For example, Isabel Schnabel, a member of the ECB Executive Board, believes that with investors turning to Europe, now is a favorable time to strengthen the euro’s global position.  

So far this year, investors have been selling off the US dollar, with data showing the dollar declining against all major currencies.  

At the 31st Dubrovnik Economic Conference held last Saturday (June 7th), Schnabel stated that there are currently opportunities to increase the euro’s international role. She added that there are signs investors are looking to the European continent to diversify their portfolios, calling this a "positive confidence effect."  

Prior to this, European policymakers including ECB President Christine Lagarde had already signaled that officials are seeking ways to turn the US’ attacks on global trade into an advantage for the eurozone.  

Notably, Wall Street investment bank Goldman Sachs has also recently expressed optimism about the euro’s future trajectory. In a report, Goldman strategists wrote that Friday’s US nonfarm payroll data aligns with the trend of slowing real economic activity and should pressure the dollar for some time. "The dollar’s depreciation may be entering a new phase, and we still believe this situation will continue," strategists such as Kamakshya Trivedi wrote in a June 6th report.  

Goldman Sachs also raised its 3-month forecast for EUR/USD to 1.17, and its 6-month and 12-month forecasts to 1.20 and 1.25 respectively, citing slowing US economic activity and a shift in global investor sentiment. The firm previously forecast the pair at 1.12 for 3 months, 1.15 for 6 months, and 1.20 for 12 months.  

**Is the Euro About to Shine?**  

Last Saturday, Schnabel also mentioned that talks with financial market participants show investors are increasingly interested in diversification and turning their attention to Europe, "which is another piece of good news."  

She also noted that Europe’s markets are drawing attention due to expected increases in public spending on defense and infrastructure. "In the case of Germany, it has significant fiscal space, and investors are actually very positive to see that Germany has finally abandoned austerity policies."  

Schnabel emphasized that increased investment in Europe has eased the region’s financial conditions, "which is another very positive impact." She also proposed the need for a large European bond market to strengthen the euro’s global status and suggested considering joint bond issuance to fund European public goods.  

In recent weeks, many senior ECB officials have frequently called for accelerating the enhancement of the euro’s international status.  

At the end of May, President Lagarde stated that Trump’s unstable policies provide an "excellent opportunity" to strengthen the euro’s role, and Europe should seize this chance to争取 more of the financial privileges currently独享 by the US dollar. She added that these changes "open the door to a 'global euro moment,'" and politicians should grasp this opportunity.  

In an interview on Sunday (June 8th), Bank of Spain Governor Jose Luis Escriva also emphasized, "The US dollar’s dominance as an international reserve currency appears to be reaching its peak."  

Escriva noted, "The euro has the potential to compete with the US dollar, especially if the eurozone can maintain macroeconomic and institutional stability. With a strong economy and trade volumes exceeding those of the US, Europe could strengthen the euro’s role as a reserve and reference currency in international trade, which is still dominated by the US dollar."  

German Bundesbank President Joachim Nagel expressed similar views but warned that the US dollar should not lose too much influence.  

"From a European perspective, we need to strengthen the euro and make Europe more attractive to foreign investors," Nagel said on Sunday. "Of course, we also need to closely monitor the US dollar and hope it remains stable."  

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