File - A sculpture featuring the euro logo in front of the former headquarters of the ECB in Frankfurt, Germany.
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Quantitative easing (QE) may be helping Europe achieve its economic targets, but it's also undermining the long-term viability of the euro by tarnishing its allure as a global reserve currency.The euro now accounts for just 22 percent of worldwide reserves, down from 28 percent before the region's debt crisis five years ago, while dollar and yen holdings have both climbed, the latest data from the International Monetary Fund show.The decline in euro reserves suggests other central banks consider the ECB's 1.1 trillion euros ($1.2 trillion) of QE bond purchases, which started a month ago, to be the biggest threat to the currency's global status since its 1999 debut.All this is prompting banks from Citigroup Inc., the world's biggest foreign-exchange trader, to Goldman Sachs Group Inc. to predict the euro will fall below parity with the dollar this year, from a 12-year low of $1.0458 last month and $1.0634 Friday.The changes came as the yen and euro each sank 12 percent versus the greenback last year.
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