Journal of Xiamen University
Since the introduction of Euro, the international monetary structure has changed and the international dominant role of the dollar has been challenged. For the private sector, this challenge affects their choices of currency for valuation of international trade, payment and reserve. For the public sector, this challenge affects the choices of intervention currency, reserve currency and pegging currency. However, because the monetary markets and the capital markets in the Euro area have not yet been completely integrated, because relevant laws and rules still need further integrating, and because of inertia of practice and historic traditions, the competition between Euro and the dollar is still a progressive process and will not radically shake the dollar's present hegemony in a short time. But in the long run, with the resolution of the problems affecting Euro's competitive power, Euro will become relatively stable and strong, and will further share the dollar's hegemony.