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Barack Obama

France to tackle dollar’s dominance

Monday, July 07, 2014 - 01:55

France is calling for currency ''re-balancing'' in global trade after the massive fine imposed by the U.S. on BNP Paribas. As Sonia Legg reports it's expected to raise the issue of the dollar's dominance at a meeting of finance ministers in Brussels.

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Angela Merkel is a regular visitor to China - it's one of Germany's biggest export markets. The business trip has already resulted in new deals - one of the first to be announced was with Airbus for 123 new helicopters. The price was probably agreed in U.S. dollars despite neither country using the currency. That's what France is hoping to change. Finance Minister Michel Sapin is calling for a re-balancing of the currencies used for global trading. He wants a stronger euro and a less dominant dollar. Ian Stannard is Head of European FX Strategy at Morgan Stanley. SOUNDBITE: Ian Stannard, Head of European FX Strategy Morgan Stanley, saying (English): "I think this is a general trend which we're seeing with regards to global trade. We've seen it in Asia with China increasingly looking to make agreements to settle in local currencies so I think this will be a continued theme but at the moment I don't think it is going to be a threat to the dollar's dominance." The move follows a record $9bln fine imposed on BNP Paribas by the U.S. The French bank didn't break any European laws but America was able to prosecute because the transactions were in dollars which made them subject to U.S regulations. French banks Credit Agricole and Societe General are now both reviewing whether they violated U.S. sanctions. Sapin is confident they won't result in charges. He's been discussing the currency issue with his colleagues across the euro zone. Total CEO Christophe de Margerie is one supporter - he sees no reason for oil purchases to be made using the U.S. currency, even if the benchmark price remains in dollars. Exactly how Sapin hopes to achieve his aim isn't clear. The market - not politicians - decides which currency to use. And the last survey of the $5 trillion a day foreign exchange market reportedly showed 87% of transactions involved dollars.

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France to tackle dollar’s dominance

Monday, July 07, 2014 - 01:55

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