Commerzbank analyst Thu Lan Nguyen says the ECB has expanded its EUREP repo facility. This lets all eligible non-euro central banks access euro liquidity, unless regulators exclude them. The goal is to make euros available outside the euro area, especially when markets are disrupted.
This change follows EU efforts to strengthen the euro’s role in global finance. The ECB’s approach is simple: widen access so euros are available when needed.
Euro Liquidity Lines Still Lag The Dollar
Nguyen says demand for the ECB’s euro liquidity lines has been low compared with the US Federal Reserve’s arrangements. During the coronavirus pandemic in 2020, outstanding drawings on the Fed’s US dollar lines to foreign central banks peaked around USD 450 billion.
The Federal Reserve also has permanent swap lines with five major central banks: the ECB, Bank of Japan, Bank of England, Swiss National Bank, and Bank of Canada. This comparison highlights a key point: in times of global stress, demand clusters around US dollars, not euros.
The ECB’s wider goal is to increase the use of euros for cross-border payments, including transactions between third countries.
The ECB wants to make the euro more attractive internationally by making euro liquidity easier to access. But when markets are in turmoil, demand still concentrates on the US dollar. This reality continues to limit how far the euro can strengthen against the dollar.
Implications For Eurusd Positioning
Recent data supports this view. The January 2026 SWIFT report showed the dollar holding nearly 47% of global payments, while the euro stayed near 23%. The ECB’s own data for Q4 2025 also showed that usage of the expanded EUREP facility was under €15 billion. That is small compared with the liquidity the Fed provides during periods of stress.
From the perspective of 2025, this pattern is well-known. In 2020, dollar liquidity lines surged to about $450 billion as institutions raced to secure dollar funding. Similar flight-to-safety behavior appeared again during the 2022 energy crisis. Both episodes reinforced the dollar’s role as the world’s main reserve and crisis currency.
For derivatives traders, positioning in the coming weeks should reflect this. Any rise in global risk stress—driven by geopolitics or financial instability—can be treated as a bearish signal for EUR/USD. In that case, buying EUR/USD put options or selling futures can be practical ways to position for a stronger dollar.
This is also a volatility story, not only a direction call. Because dollar demand often jumps quickly in a crisis, a useful approach can be to own options that benefit from a volatility spike. That can help capture a sharp drop in EUR/USD before broader market fear becomes obvious.
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