In the fourth quarter of 2008, the share of the euro rose by around one percentage point – again, after adjusting for valuation effects (CHART 1).
It is conceivable that these latest developments have been mainly driven by emerging market central banks which have intervened to defend their currencies during the second half of 2008 and have mainly done so by selling US dollar-denominated assets. Whether one should attribute this latest moderate increase in the share of the euro to a genuine change of currency preferences is therefore not obvious.