Pound Falters in Global Payments While Euro Hits Top Spot
(Bloomberg) -- The pound’s popularity in cross-border payments tumbled to its lowest level in more than a decade as the U.K. navigates the post-Brexit landscape, while the euro edged out the dollar for the top spot last month.
Sterling’s market share has dropped for four straight months and in May registered the lowest usage since at least 2010, when the Society for Worldwide Interbank Financial Telecommunications started tracking the data. In contrast, the euro overtook the dollar for the first time since October as it commanded the highest market share since February 2013. The greenback saw its popularity slip to the lowest since January.
Britain’s exit from the European Union has left a cloud over the currency as investors weigh the prospects for trading agreements with other major partners. In contrast, the euro continues to make strides as the next-best alternative to the greenback, with Europe this week kicking off its biggest-ever sovereign bond deal to fund the region’s recovery. Still, the greenback remains the world’s premier reserve currency.
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- The yen also dropped in popularity last month, while the yuan regained the fifth spot, pushing the Canadian dollar to the sixth. Still, the renminbi accounted for about 1.9%, the least since December
- The Chinese currency was ranked 35th in October 2010, when Swift started tracking currencies in this way
- NOTE: Swift handles cross-border payment messages for more than 11,000 financial institutions in 200 countries. It releases the data in its monthly RMB Tracker on the renminbi’s progress toward becoming an international currency
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