In terms of international trade, in the import and export trade of goods and services between euro zone countries and countries outside the region, the use of euro has increased sharply, and about 50% of foreign trade in the euro zone is settled in euros. In terms of the use of euro cash, the euro has successfully replaced the currencies of former EU member States in some neighboring countries of the EU. Statistics show that the euro cash circulation outside the euro zone is between 20 billion and 25 billion euros, accounting for 8% of the total euro circulation. In addition, in the process of euro cash conversion, the euro deposits of EU neighboring countries increased from 38 billion euros to 52 billion euros. Although the US dollar will remain the main international settlement currency in the foreign exchange market, oil and aircraft transactions for a long time, some oil-producing countries have also begun to try to switch to the euro for oil transactions. For example, Iraq switched to the euro, and Iran hopes to exchange oil for the euro, because nearly half of its imported products come from euro-zone countries. It is worth mentioning that more and more international borrowers use the euro for financing. Before the euro appeared, only 8% of money market instruments were priced in the currencies of euro zone countries. After the advent of the euro, about 25% of the trading tools issued by residents outside the euro zone were priced in euros. At present, about 30% of international bonds issued by residents outside the euro zone are priced in euros, while less than 20% of similar international bonds were priced in the currencies of euro zone countries before 1999. By the middle of 2002, the euro international bonds issued by non-residents increased by 33% compared with the beginning of 200 1, accounting for 20% of the global international bond issuance.

As an international currency in circulation and trading, the euro has good liquidity and practicality, which can reduce exchange rate risk, exchange and settlement costs and save foreign exchange hedging costs. It is estimated that the current cost of foreign exchange hedging reaches 4% ~ 5% of the total transaction amount, and the widespread use of the euro undoubtedly reduces this cost. The emergence of the euro has broken the situation that the dollar dominates the world, and some currencies used in world commercial and financial transactions will be transferred from the dollar to the euro. The proportion of US dollar in the international monetary structure will gradually approach the level of American economic strength, and the strong economic strength of the euro zone will become the strong backing of the euro.

As an international settlement currency, we must first ensure the stability of the exchange rate. Whether the euro can remain stable in the international financial market in the future is a hot topic of debate. According to the popular modern monetarism theory, whether the currency can be stable or not depends largely on the central bank, the monetary management authority, so people always pay attention to the European Central Bank for the future of the euro. The European Central Bank can be said to be the most independent bank in the world, and its monetary policy goal is to maintain price stability. The European Central Bank's commitment to price stability-keeping the medium-term inflation below 2%-will help to enhance the confidence of international investors and provide strong support for the euro as an international settlement currency.

The Influence of Euro on the Structure of International Reserve Currency

The impact of the euro on global finance is gradual and long-term. The improvement of the status of the euro as an international settlement currency will promote the increase of foreign exchange demand for the euro, promote the development of the euro bond market and trigger the substitution of foreign exchange reserves. In order to reduce the exchange rate risk of reserve currency and assets, countries (especially those with close trade and debt relations with euro member countries) will increase euro reserves according to bilateral trade and debt volume. According to the statistics of the International Monetary Fund, in 2002, the euro accounted for 13% of the foreign exchange reserves of central banks around the world. Although it was far behind the US dollar by 68%, it was far higher than the third-place yen (only accounting for 5% of the foreign exchange reserves of central banks). The composition of foreign exchange reserves announced by some industrialized developed countries shows that the share of euro is still rising, while some emerging Asian countries also claim to increase a larger proportion of euro reserves.

In general, the choice of international reserve currency by countries all over the world mainly depends on the following reasons: First, the economic strength of the reserve currency issuing countries. The stronger the economic strength of the issuing country of reserve currency, the stronger people's confidence in the country, so the more likely it is to adopt this currency. Second, the stability of the reserve currency. The more stable the currency value of an international reserve currency is, the less the risk of devaluation if it is retained. Third, the import and export volume and foreign capital circulation of reserve currency issuing countries. The greater the import and export volume and foreign capital circulation of the reserve currency issuing country, the more the country needs to hold its currency for trade settlement and capital lending, so the more likely it is to choose its currency.

In terms of economic strength, the euro zone includes 12 countries with a total population of about 302 million (272 million in the United States and 654.38+27 million in Japan). The GDP of the euro zone accounts for 16.2% of the world, 5.7 percentage points less than that of the United States and more than twice that of Japan: the proportion of the euro zone in international trade is 20%. It can be seen that the European Union is comparable to the United States in economic strength and international trade. However, from a dynamic point of view, after the effect of the EU's single monetary policy comes into being, its strength in all aspects will be further enhanced. In this way, the euro may become the main international reserve currency for countries to increase their holdings.