DMLRY - FXE: Russia's Rubles For Gas Demand Hurts The Euro Currency
- Russia's decision to demand ruble payments for its natural gas exports to the EU, threaten the viability of the euro currency as a global FX reserve.
- Before this latest blow to the global status of the euro, there was some hope in Europe that the euro could compete with the USD as a global reserve currency.
- Other underlying trends such as a widening trade deficit, a slowing economy, as well as high sovereign debt rates make the euro already a vulnerable target.
- Because of the very high levels of sovereign debt in the Eurozone, the ECB will find it very hard to shift into currency defense mode, even as the threat of a global sell-off of the euro emerges.
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FXE: Russia's Rubles For Gas Demand Hurts The Euro Currency