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ECB's Nagel Says Stronger U.S. Dollar Is Still Needed
Published by Global Banking & Finance Review®
Posted on May 14, 2025
1 min readLast updated: January 23, 2026
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ECB's Joachim Nagel stresses the need for a strong U.S. dollar as a global reserve currency, while anticipating the euro's growing role.
ECB's Nagel Highlights Need for Strong U.S. Dollar
MADRID (Reuters) -European Central Bank policymaker Joachim Nagel on Wednesday underlined the role of the U.S. dollar as a reserve currency for the global system that was needed, though he also expected the euro to become stronger in that same role over the next few years.
"The dollar is very important for the world financial system, we still need a strong dollar," Nagel told an event in Madrid.
Some investors have reduced their exposure to the dollar in recent months, worried that trade tensions and erratic policy by the U.S. administration will ultimately erode the greenback's global reserve currency status.
But others argue that there is no alternative for now since the dollar market is far bigger than any other competitor, and the euro zone, the largest potential challenger, is simply too fragmented.
(Reporting by Jesús Aguado; Editing by David Latona)
Key Takeaways
- •Joachim Nagel stresses the importance of a strong U.S. dollar.
- •The dollar remains crucial for the global financial system.
- •Some investors are wary of the dollar's future due to U.S. policies.
- •The euro is expected to gain strength as a reserve currency.
- •The euro zone's fragmentation limits its current challenge to the dollar.
Frequently Asked Questions about ECB's Nagel says stronger U.S. dollar is still needed
1What is the main topic?
The article discusses the importance of a strong U.S. dollar as a global reserve currency, according to ECB's Joachim Nagel.
2Why is the U.S. dollar important?
The U.S. dollar is vital for the global financial system due to its size and role as a reserve currency.
3What is the future outlook for the euro?
Nagel expects the euro to strengthen as a reserve currency over the next few years.
