The share of the euro in foreign exchange transactions today has not significantly augmented in comparison with the previous national currencies, accounting for about one-fifth to one-quarter of all daily transactions. By way of comparison, the US dollar is used in more than forty percent of foreign exchange transactions.
The logic of the portfolio balance channel implies that the degree of accommodation delivered by the Federal Reserve’s securities purchase program is determined primarily by the quantity and mix of securities the central bank holds or is anticipated to hold at a point in time (the “stock view”), rather than by the current pace of new purchases (the “flow view”).