Rabobank’s Global Daily report covers the European Central Bank’s decision to let all non-euro area central banks borrow euros against euro-denominated collateral. It says the move is meant to support the euro’s role outside the euro area.
The report raises a key question: is global use of the euro limited by supply or by demand? It also links the policy to the need for a bigger market in euro-denominated assets.
Euro Global Liquidity
It says the change could mean a larger European trade deficit. It also says it could push the euro exchange rate higher.
The report notes that a stronger euro could be politically sensitive across euro area member states. The article also states it was produced with the help of an Artificial Intelligence tool and reviewed by an editor.
The European Central Bank wants to raise the euro’s profile globally. By letting central banks outside the Eurozone borrow euros, it increases the euro’s global supply and makes it more attractive. This also signals that the ECB is comfortable with a stronger euro.
For traders, this could support a long euro view in the coming weeks. With EUR/USD trading near 1.0850, this news could help the pair break above the 1.09 resistance seen last month. One way to position for this is to buy euro futures or call options to benefit from a potential move higher.
Managing Political Risk
Options may be the better choice because of the political risks. Buying EUR/USD call options with a strike near 1.10 could let us benefit from a stronger euro while limiting losses if some member states push back. Uncertainty in countries such as Italy could also increase currency volatility.
This policy points to a structural shift that could support a stronger currency over time. A stronger euro could move the region’s trade balance into deficit from the €15 billion surplus in the final quarter of 2025, because European exports would become more expensive for the rest of the world.
The ECB’s motivation is clearer when we look at global reserve data from last year. In 2025, the euro made up just over 20% of central bank foreign currency holdings, while the US dollar was near 59%. This move appears aimed at narrowing that gap.
We should watch for political pushback, since that is the main risk to this trade. In 2025, disagreements over fiscal policy created headwinds for the currency. Any strong opposition from a major member state could quickly reverse euro gains.
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