U.S. Need Not Fear Challengers to Dollar, Fed Official Says

The United States would not necessarily lose out if other currencies emerged as alternatives to the dollar’s status as the world’s so-called reserve currency, a top U.S. central banker said on Tuesday.

William Dudley, president of the Federal Reserve Bank of New York, did not comment on U.S. interest rates in a speech. Rather he said Americans should not be concerned if, for the right reasons, other currencies started to eat into the dollar’s 60-percent share of foreign exchange reserve holdings.

“I don’t see this as a zero-sum game,” Dudley, one of the most influential Fed policymakers, said in prepared remarks to a conference in Zurich that was closed to reporters.

“If other countries’ currencies emerge to gain stature as reserve currencies, it is not obvious to me that the United States loses,” he said, as long as it “is being driven by their progress, rather than by the U.S. doing a poorer job.”

Reuters

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.