Can American Dollar Survive the Onslaught of Euro? An Empirical Investigation

U21Global Working Paper No. 001/2006

24 Pages Posted: 16 May 2010

See all articles by Wing-Keung Wong

Wing-Keung Wong

Asia University, Department of Finance

Habibullah Khan

U21Global Graduate School

Date Written: February 1, 2006

Abstract

The American dollar has been the anchor currency of the international monetary system and no other currencies have so far been able to rival the greenback in its standing. Does the birth of Euro pose a challenge to the hegemony of the dollar as the predominant currency? This paper seeks to answer the question by first reviewing the process of internationalization of the euro and then examining the movements in dollar-euro exchange rates by means of cointegration techniques. By identifying the key determinants of the exchange rate and analysing the recent developments in the euro area and the United States, the paper discusses some important policy implications for ECB and the success of Euro in general.

Keywords: International monetary systems, Exchange rate, Monetary economics

Suggested Citation

Wong, Wing-Keung and Khan, Habibullah, Can American Dollar Survive the Onslaught of Euro? An Empirical Investigation (February 1, 2006). U21Global Working Paper No. 001/2006, Available at SSRN: https://ssrn.com/abstract=1606063 or http://dx.doi.org/10.2139/ssrn.1606063

Wing-Keung Wong

Asia University, Department of Finance ( email )

Taiwan
Taiwan

Habibullah Khan (Contact Author)

U21Global Graduate School ( email )

88B, Level Three, Amoy Street
Singapore, 069907
Singapore

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