According to a report by the European Central Bank, the U.S. dollar’s share in global foreign exchange reserves continued to fall in 2024, but the euro has not become the main beneficiary. Instead, gold and less traditional currencies like the yen and Canadian dollar are gaining ground.

The dollar’s share dropped by 2 percentage points in a year, now standing at 58%, which is 10 points lower than a decade ago. Meanwhile, the euro’s share remains below 20%, despite ECB President Christine Lagarde highlighting the opportunity for the euro to strengthen its role.

Gold emerged as a major winner, with central banks purchasing over 1,000 tonnes—double the average annual level of previous years. ECB data shows that two-thirds of central banks did so for diversification, while 40% aimed to hedge geopolitical risks. As a result, gold’s share in global reserves reached 20%, surpassing the euro’s 16%.

Although recent months have shown signs of growing investor interest in euro assets and a weakening dollar despite rising U.S. yields, experts warn that the eurozone still lacks the financial infrastructure needed to challenge the dollar’s dominance. Issues include the absence of a unified safe asset, fragmented debt and banking markets, and limited geopolitical and military strength.