*  *  *  Among the major forces that will help shape the euro’s future as a world currency will be the international evolution of the euro area’s key financial counterparty, the United States. I will leave the important interplay between the euro and the dollar - and particularly forecasts of the dollar-euro exchange rate - to more venturesome analysts.
My experience is that exchange markets have become so efficient that virtually all relevant information is embedded almost instantaneously in exchange rates to the point that anticipating movements in major currencies is rarely possible.1 I plan this morning to head in what I hope will be a more fruitful direction by addressing the evolving international payments imbalance of the United States and its effect on Europe and the rest of the world.