Credit: REUTERS/MOHAMED ABD EL GHANYLONDON, Nov 19 (Reuters) - The euro's share of global payments rose in October but the dollar remained the top currency for international payments and trade financing, according to monthly payment flows data from SWIFT.
The euro accounted for 38.52% of global payments last month, compared with 37.15% in August, and up more than 5 percentage points from the start of the year for customer and institutional payments excluding the eurozone.
In comparison, the dollar narrowly retained its position as the world's top funding currency with a 41.71% market share, down 5 percentage points from the start of 2020.
"The dollar is the number one, but the euro has been close on its heels for some time," said Commerzbank's head of FX and Commodity strategy, Ulrich Leuchtmann.
"It comes as a surprise to economic historians and theorists that there is such a strong number two these days. Usually foreign traders of this world should agree on one lead currency. Everything else is not really efficient."
The euro's rise coincides with a period of coordinated efforts by the region's policymakers to protect its struggling economy from the coronavirus pandemic.
The single currency EUR=EBS is among the top performing currencies versus the U.S. dollar in 2020, with a year-to-date gains of more than 5%. Bonds sold by the European Union to back its employment scheme have seen red-hot demand, led by central banks.
Still, the dollar held the top position in the trade finance market, with am 85.56% share in October. In comparison, China's yuan had just 1.09% of international payments, in eighth place.
(Reporting by Elizabeth Howcroft; editing by Saikat Chatterjee, Larry King)
((Elizabeth.Howcroft@thomsonreuters.com; +44 02075427104;))
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