Euro gains ground on US dollar in global reserves as central banks adjust to Trump tariff chaos

The dollar just fell to 56.92% of total global reserves in the third quarter of 2025, down from 57.08% the quarter before.

That number came straight from the International Monetary Fund, which dropped its latest breakdown on Friday. The euro, on the other hand, edged up. The single currency rose to 20.33%, from 20.24% in Q2.

This change followed a messy second quarter when President Donald Trump threw the entire foreign exchange market into chaos with his tariff decisions.

That blow hit the dollar hard. Now, the world’s central banks seem to be settling down, at least for now. The latest data shows that while some rebalancing happened, the numbers mostly held steady in Q3, ending September with minimal swings in allocations.

Central banks adjust holdings as yen, euro rise and IMF tweaks method

The Japanese yen picked up steam too. It moved from 5.65% in the second quarter to 5.82% in Q3. These are small movements, but they happened during a period when reserve managers weren’t taking chances. They were reacting to the sharp market waves kicked up earlier in the year.

Goldman Sachs weighed in. Analysts from the bank said, “For both dollar and euro reserves, our FX valuation adjustment suggests that reserve managers leaned into currency market fluctuations.”

They added that Q3 brought “a stabilization in reported reserves with only minimal shifts in the share of USD and EUR reserves following large swings in reported reserves in Q2.”

At the same time, some changes weren’t even about market reactions. They were technical. The IMF rolled out a methodology update in the latest report. Before, there was an “unallocated” section for countries that didn’t report complete data.

Now, that slice is being filled in with new estimates. This fix was also applied retroactively to year 2000, so it adjusted some past numbers slightly, but nothing that would shake current analysis.

Behind all these tweaks and tiny changes is one giant question that won’t go away: Is the dollar losing its hold as the global reserve currency? Some analysts think we’re seeing the very early signs of de-dollarization.

But even they admit that any move away from the dollar would take years, not months. For now, it’s still the top dog. Just not by as much as before.

Treasury yields rise ahead of $183 billion in bond auctions

While reserve managers recalculated, the Treasury market didn’t wait. Yields crept higher Monday as investors geared up for a packed week of note auctions.

The 10-year yield, which is the bellwether for U.S. government borrowing, inched above 4.165%, up more than 1 basis point. The 2-year yield ticked up too, to 3.492%. The 30-year bond yield moved past 4.846%.

It wasn’t just those. The 1-month note hit 3.63%, the 3-month stayed flat at 3.615%, and the 6-month rose to 3.608%. The 1-year nudged up to 3.516%, while the 2-year, again, posted 3.494%.

Even the 30-year crept up to 4.833%, with the 10-year closing near 4.159%. That was the warmup. The real test starts with a $69 billion auction for 2-year notes on Monday. That’s followed by $70 billion in 5-year notes Tuesday, and $44 billion in 7-year bonds on Wednesday.

These auctions come with weight. They offer clues on how investors are feeling about debt, inflation, and interest rates as we move toward 2026.

All of this is happening after the Bureau of Labor Statistics reported that the consumer price index climbed at a 2.7% annualized rate last month. That drop in inflation has cooled some nerves, but not enough to push the market into expecting a January rate cut. At this point, most traders aren’t betting on one.

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